Can you Really Beat The Market?

Before we get into what it takes to make money in the stock market, and how. We must ask ourselves, “Can we beat the market?”

The so-called “professionals” will most likely tell you that you have no chance in competing against them and consistently beat the market. For the most part, they recommend you put your money into a Mutual Fund or an index that tracks the Standard and Poor’s 500 and let them do the heavy lifting for you. This is not to say these professionals can do better than the bench mark, they only believe that if they can’t beat the market, with all the resources available to them, you certainly would fail trying because you do not have anywhere near as much information as they do. Depressing, right?

I am not here to tell you anyone can beat the market. It isn’t easy at all. If it were, Wall Street pros would be out of work.

I am here to tell you that you can beat the market only if you’re willing to do the work. If you’re willing to put in the time to learn through your own mistakes, as well as through the mistakes others make, your chances of beating the market will increase exponentially. In fact, retail investors have certain advantages that the pros do not have. These advantages are the tools that we will use to beat the market and put an end to the old myth that retail investors are incapable of beating the market.

As the manager of Fidelity’s Magellan fund, Peter Lynch was able to beat the market from 1977 to 1990, with average annual returns of 29.7% during that time, Peter Lynch became a Wall Street legend. Mr. Lynch believes that retail investors can beat the market by simply utilizing their own knowledge of the marketplace. Lynch states that by doing research, having patience, and resilience average investors can outperform the market. Lynch found some of his best ideas when he was out with his family, traveling or talking with friends and associates. As one famous story goes, one day his wife excitedly told him how much she liked L’eggs pantyhose, a new product she’d just tried out. After looking into the company’s prospects and liking what he saw, Lynch bought stock in the Hanes Company, maker of L’eggs, and his fund investors realized a 30-fold appreciation.

Peter Lynch is not the only one who has put this theory to the test. Dozens of portfolio managers in The Street have also successfully implemented this style of investing. From Warren Buffett to Jim Cramer, many have amassed vast wealth and success simply by using every day knowledge. In my investing career, I have adopted this method, making lots of money for my clients over the years. This is why I believe that you can beat the market as well. So, if you really want to learn and put some extra cash in your account, follow me through this journey.

In the course of the following months, I will share with you everything I know about picking stocks. From how to identify an investment, to how to valuate it, and determine when to buy or sell it. Check in to the blog often, you never know what new things you may find.