10 Mistakes every investor makes - from Peter Lynch's book

“It can’t go any lower.” Never make such an assumption. A bad company can and will go lower.

“How much higher can it go?” Selling too early just because a stock goes up.

“They always come back” Don’t assume a stock price will rebound, look at the fundamentals not the price.

“How much can I lose?” A cheap stock price doesn’t equal a good value. You can lose % at any price.

“It’s always darkest before dawn.” It’s a terrible business but it’s down 80%! Buy at a discount? no, it still has room to drop.

“I will sell after rebound” Buy at $10, it falls to $6, and you think "If it goes back to $10 I’ll sell. Well if you think that you should buy more! A key to remember, the stock doesn’t know you own it. It may never get to $10 again as well. Don’t take it personally. Make decisions based on fundamentals.

“Don’t worry, I own conservative stocks” (utilities…)

“Look at the money I lost because I didn’t buy” FOMO? Hundreds of stocks go up double digits. Don’t worry about other stocks. Focus on ones you know. You can’t lose money on a stock you don’t own.

“Stock is up I must be right / Stock is down I must be wrong.” Stocks go up and down a lot each year. The ups and downs don’t mean much in the short term.

Avoid longshots. Investing based on rumors, comments, anything other than sound financial analysis and valuation.

Peter Lynch worked at Fidelity and is has great wisdom.

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