Peter Lynch's Pearl of Wisdom

Another One of Peter Lynch's Many Pearls of Wall Street Wisdom

Lynch once said in an interview that putting money into stocks and counting on having nice profits in a year or two is "just like betting on red or black at the casino...... What the market's going to do in one or two years, you don't know."

This is a crucial general approach shared by Lynch and many of the other gurus of investing. It's simple in theory, but in practice it is one of the hardest things for an investor. Lynch recognized that the stock market was unpredictable in the short term, even to the smartest investors. Over the long term, however, good stocks rise like no other investment vehicle. Lynch's philosophy: Use a proven strategy and stay in the market for the long term and you'll realize those gains, jump in and out an there's a good chance that you'll miss out on a chunk of them.

That, of course, means resisting the temptation to bail when the market takes some short-term hits and good stocks fall in value - no easy task. But as Lynch once said, "The real key to making money in stocks is not to get scared out of them."