Over the past 12 months, the stock market has rallied by a substantial amount. With this uptrend we run into the question: how do we invest in the stock market at all-time highs? You might see and think that there are many dangerous scenarios that could happen for one stocks could keep going up and up and you can miss out for another. A stock market crash could come and leave you holding plenty of falling stocks in this video. I'm going to explain what peter lynch's thoughts about investing in stocks that all-time highs is and what i'm personally going to do with.

That being said, let's get right into it. Some of you may know peter lynch as one of the greatest investors of all time in the 13 years that he managed the magellan fund. He achieved an average return of 29.2 percent per year. That return is more than twice what the s p 500 did during that time and is equivalent to a 28x return in just 13 years in order to get a sense of what to do in the current market.

We're going to take a look at what peter lynch stated in the year 1997, which was in the midst of the dot-com bubble. Internet stocks continued to go up, and up and many internet stocks were worth 10 times more than what they were actually worth. Lynch mentions in the following interview that trying to time the market is actually the worst thing you can do. Every year we always have people trying to predict a stock market crash, and this is evident today with many investors.

If a quote-unquote expert keeps predicting that a crash is coming every year, they're bound to be right at some point. Nevertheless, most of the time, those that try to predict stock market crashes are incorrect. Remember this one: it's futile to predict the economy, interest rates and stock market. I mean people keep trying to do this.

I mean this would be useful. I would love to know when every session i'd love to know when interest rates can go up or down. I'd love to know when the stock market's going up. That would be helpful.

I would like to get next year's wall street journal uh. Unfortunately, you don't get it. I remember. In 1982, we had a lot of people's room around for 82.

We had uh 20 prime rate 15 long governments double-digit unemployment, double-digit inflation. I don't remember anybody tell me about that. 1980.. I remember everybody tell me about that.

1981 but 83. I remember they said well. The economies would bounce back when recession 85. 85.

They said whatever recession 86 in 87, something happened in october 87.. I figured out what something i'll do this one celtics lost seven in a row, some something bad with 87.. They said for sure every session 88 and they said 89 for sure every session and then 90 we're supposed to have the so-called soft landing which we never had. So i've always said: if you spend 13 minutes a year on economics, you've wasted 10 minutes and you might be confused here.

If timing, the market is impossible, then what are you supposed to do? The answer to that is, instead of trying to speculate, you need to deal with the facts of the stocks you own in their respective industries. What are the numbers that back up a business's growth potential revenue, growth or financial strength? What did the business management team say about the future of that business? All you need to know about the stock market is, it goes up and it goes down and it goes down a lot and that's all you need to know again, it'd be terrific to know. What's gon na happen economy, but i deal with facts: if inventories are going up, if copper prices are going down, if room occupancy is going the wrong way, people building too many hotels. I look at freight car loadings, my own railroad stocks.

I deal with facts. I don't deal with people. Tell me something's gon na happen in the future. You might as well call the psychic hotline for that stuff to get better average.

The important concept to understand is that time in the market beats timing. The market, as long as you're spotting a company with great fundamentals, you'll end up coming out on top over the long term in the following clip. Lynch shows how this works with walmart stock. You can buy walmart 10 years after walmart, went public, say a very careful investor.

You waited, you said. I don't know. If this company can make it you waited for walmart to roll it out, you could buy walmart 10 years after they went public and made 30 times your money 30 times your money, 10 years after they went public they're only in 15 percent, the united states, one Five, they unsaturated the one five you could say: well why can't they go to 17? Why can't they go to 19.? I mean why? Don't i take a leap of faith here? Why can't they go to 26.? All they did for the next three decades was roll. It out you could buy walmart if the day they went public, your body would make 500 times your money.

If you waited 10 years in walmart, you made 30 times money. You got plenty of time this business. The next topic that is extremely important is the idea of buying the next of something. Today we see many people chasing the next tesla, the next amazon or even the next google, in a bull market chasing the next huge opportunity may seem reasonable.

However, you have to recognize that most of the time that company will never become the next tesla amazon or google, in addition to this, a common but dangerous habit is to worry too much over winning stocks that you didn't invest in. You don't have to invest in every winning stock. You just need a few, or even one winning stock to make huge returns. I lay one of my books listed on two pages in the 13 years of magellan.

I listed, i think, about 200 stocks, a through l on the new york stock exchange. They went up 10 fold or more that i didn't own well, i ran magellan. I had on lots of stocks, i listed 200 stocks, a foreign. I stopped the letter.

L and i didn't know any of the shares. They went up tenfold or more and i was able to do. Okay with magellan and people worry all the time about missing microsoft, missing western digital missing, united airlines. They spent all their time worrying about stocks.

They missed. You cannot lose money in a stock. You don't own, that's a variable. You have.

The only way to lose money is buy stock. Have it go down and sell it? That's the only way - and i swear that people that their spouse has to cut out the newspaper in the morning cut out the seas and the person will look at the ams. Oh, my god, microsoft's up three, you know i had. I was gon na buy a thousand shares on microsoft.

I lost three thousand microsoft. Last night, while i was sleeping, you know the uh. I missed that one i'll catch the next one that usually does not work. Toys, r, us there's a lot of copycats at toys.

R us there's trial world. There was lionel there's copycats from home depot buying the next of something usually doesn't work. It's uh, it's very bad. It's like buying on dips.

I think it's always better to buy from dip, so that was a better rule than bioentex. Another common but dangerous behavior that often occurs in bull markets is that stocks get thrown around with little to no analysis when you or someone else doesn't have much analysis or don't know what they're talking about. They will eventually have horrible returns over the long term. In the dot-com bubble we saw many purchase stocks that they didn't know much about sure.

Many internet stocks rose significantly over a few months span, but in just a year many awful internet stocks ultimately went bankrupt. Today, there are many attempting to invest in individual stocks that are in sectors they're not knowledgeable about. For example, if there's one stock with medical terminology that you don't understand but is advertised as one with huge potential, then you should stay away from that doing otherwise would prevent you from telling great companies apart from subpar ones. If you let's say cement, industry goes from crummy to semi-crummy to fairly good.

The stocks are going north right, you're going to make money. That's the industry. You know when, if you know the publishing industry you're you some people, have you have an edge. You work.

I mean one of your last 30 years. You worked in the restaurant years. You would have seen taco bell. You would have seen some barrels.

You would have seen pizza hut, you've seen chili's you've seen these companies doing very well. You should have bought those instead of trying to buy biotechnology stuff. You know nothing about. I mean people.

Have this tendency to always buy something they don't. All you need is a few charlie. All you need is a few good stocks. This is your song.

This has been your song for a long time, but only buy what you know, but people waking up in the morning to say: there's 5 000 companies out there, which one should i buy, the average person ought to be able to follow four or five companies. There would be a lecture on them, they understand the companies and this forces you this tool says to you right down the street at this point, you're probably wondering what you should do. After all, we've already discussed many activities you shouldn't do. According to lynch, you should find companies that will grow significantly in the future and always look at the long-term vision.

It's impossible to predict, what's going to happen to a stock in one or two years. But it is possible to predict a five to ten year movement, and that is what you should be doing. When stocks are at all time highs, you should be analyzing whether earnings or cash flows are going to be significantly higher over a long period of time. So i have no idea when the markets can go down and no idea when it's gon na go up, i'm totally shocked.

The market was four thousand two and a half years ago, a little while ago, it's eight 8. 000. I had no idea about this. Uh very surprising to me, but i will guarantee you.

The mark will be a lot higher in 15 years. It'll be a lot higher than 25 years. What it's gon na do next one or two years. I don't have any idea and if somebody in this room knows about it, they're not telling anybody or they're not in this room, they're down in palm springs somewhere.

You know: they've made a billion dollars. I know we've had uh 96 years a century and the market's fallen 53 times, but 53 declines of 10 or more so 53 declines in 96 years, once every two years we have a 10 decline of the 53 declines. 15. 1.

5 have been 25 more so 15 and 96 years, but once every six years the market falls 25. More, that's what we call a bear market. You know, you know that, and it's going to happen, i don't care when it's gon na happen. I would love to know.

I obviously would be very useful to know when it's gon na happen. It doesn't make a difference to me. Corbett, probably a lot higher eight years from now a lot higher 16 years now a lot higher 30 years from now. That's what i deal with to go over what we should do.

According to lynch, we need to see whether stocks will be higher in 5 to 10 years, and that applies to index funds too. If you can justify a significantly higher valuation for the stock market or certain individual stocks in five to ten years, then you should be investing based on that knowledge and that's what we do on this channel by the way my patreon is now open over there. I show you my personal stock portfolio with explanations, in addition to exclusive stock reports, exclusive videos, valuation spreadsheets and more, if you're interested in joining or, if you're, just curious check out my patreon in the description below. If you enjoyed this video, please hit the like button and don't forget to subscribe and i'll see you in the next one.

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