Peter Lynch: Why Buy-And-Hold Investing Beats Market Timing

Check out this gem from page 23 of Peter Lynch’s classic “One Up On Wall Street” that explains the wisdom of always staying fully invested: “If you put $100,000 in stocks on July 1, 1994, and stayed fully invested for five years, your $100,000 grew into $341,722. But if you were out of stocks for just thirty days over that stretch—the thirty days when stocks had their biggest gains—your $100,000 turned into a disappointing $153,792. By staying in the market, you more than doubled your reward.”

That’s why I can’t really relate to people who want to sell Johnson & Johnson at $92 and repurchase it at $80, or sell Coca-Cola at $40 and repurchase it at $35, or sell Exxon at $100 and repurchase it at $85. We have to get past our natural tendencies to think linearly and keep in mind that stock prices tend to move in … Read the rest of this article!