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Hello everyone again! Today we're going to look at five tips from Peter Lix on how to invest in the stock market. If this is your first time here on the channel, welcome! My name is Hugo, and I'm self-taught in terms of savings and stock market investments. I share my knowledge with everyone through my YouTube channel.
If you like this type of content, please subscribe! Let's watch the video, and see you soon! Okay, so let's see who was Petroleum before Peter Lix, born in 1944. He's considered one of the best investors of all time. He managed a stock fund called Fidelity during his time working for the Fidelity Fund from 1977 to 1990.
This fund had an average return of 29 points and two percent per year. This value was double the value of the S&P 500 for the same period. Now, for those who do n't know, the S&P 500 is an index that was created in the United States with the 500... The largest companies in America, these companies may be listed on both the New York Stock Exchange and the Nasdaq.
The stocks in this index are qualified due to their market size, liquidity, and representation in various sectors of the economy. The index, due to containing a large number of good companies, serves as a benchmark for various funds. Bitterness having outperformed this index twice for 13 consecutive years is a remarkable fact.
When we invest in the stock market, we must have a long-term vision, investing for 10 to 20 years. Peter says that if we invest in the stock market for a short period of time, we will need the money in that short time and we shouldn't invest. This is because we are investing for one or two years and we need all the money to send our children to college or for something else, and we have the misfortune of the stock market having a correction.
When the stock market has a correction, it often means that the money invested will be worth less. This means that if it is necessary to withdraw the money by selling the shares to invest it elsewhere, we may have a lower value than we had when the money was invested. That is why Peter says that... It's better to have a long-term investment perspective of 10 to 20 years.
Peter tells us that we should always expect corrections in the stock market because the stock market is like the weather – some days it's hotter, some days it's colder, and the market is always fluctuating up and down depending on the news in the world. Because of this, those who invest in the stock market must be aware that there will always be corrections.
Those who don't handle corrections well shouldn't invest in the stock market. Peter also says that when there is a correction, people shouldn't see it negatively, as it's a good thing. If we are investing in good companies, there will be a correction, and the company's value will be halved. We can buy that company at half the price, which is great.
The second piece of advice is that we should buy shares of companies whose business we understand. Peter says that we should know what we have; we shouldn't buy shares just because their value has been rising, and that's the only reason for buying them. That's wrong, even if we can't explain to a two-year-old why...
In terms of installation in less than three minutes, then we shouldn't buy that stock. The main criterion for buying a stock is understanding the company behind that stock and its business model. He even says that I should buy stocks in which we understand a business model or even if we are consumers of their products, such as Coca-Cola, a restaurant chain.
He advises that we should always do research and, if possible, a well-founded analysis of the company's values. Peter, once in an interview, was very surprised by how careful people are today about where they spend their money. When buying an item whose value is higher than normal, they tend to do some research.
If they are going to buy a new washing machine, they will look at the prices of other brands and compare the consumption of various machines. When going on vacation, they try to find out if the place where they are going to spend their vacation is safe, has good weather, and if the hotels are of good quality.
They do the same research. What happens when buying cars? I think it's a research of similar cars, comparing prices, comparing expenses between cars, and only then making a decision. But often, when buying stocks, you hear about it at a bus stop or even on the bus. A tip about a stock, and people are so crazy and immediately put their savings into it, and then the company isn't good, something happens, they lose half their money, or almost all of it, and then it's the stock market's fault.
Therefore, it's very important to do research, look at several similar companies before buying stocks. Fourth piece of advice: don't try to predict the market. Peter Lynch means that we shouldn't waste our time trying to see if the market will go up or down and then make buying or selling decisions based on that, because trying to predict what will happen to the stock market is impossible.
He himself says that nobody can do a lot. People even try to predict interest rates, and if someone could predict interest rates three times in a row, they certainly wouldn't be a billionaire. Peter says that we should always make our buying and selling decisions based on factors that give us guarantees of that.
Fifth and final piece of advice: Peter Lynch says that you can't get too attached to a stock. What this means is that if a stock that we own and really like because it has appreciated a lot, we have an esteem for it, for some reason it is losing value. If there are better results, then we should sell that stock because behind every stock there is a company.
If that same company is having better results and losing its fundamentals, then we should sell that stock even if we have some affection for it, because that way we wo n't lose money. So that's it for today. I hope you enjoyed the video. If you watched this far, leave a like and I'll see you in the next video. Thank you!
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