LY Med's video: How to Achieve 30 Stock Returns for 30 Years Investing Rx Ep 18

Consider supporting this channel on patreon.com/lymed In our previous video, I gave a portfolio update and told everyone my overall goal for my stock investment account – which is 30 years with an average annual return of 30%. I call it the 30 for 30 plan . This is much higher than the average return if you just put your money in a stock fund that tracks the US total market. Doing that is an incredible way to invest, and something I recommend to most new investors – and has overall returned an average of about 8-9%. Which is great. However you may want to invest in more individual stocks or stocks you strongly believe will rise higher than the market. This obviously comes with more risks and requires much more due diligence -that is why most people who pick stocks lose money and why most people are advised to just buy a total market fund. That being said, I’m was doing both. I had accounts that invest automatically into the US total market, but I also feel comfortable picking my own stocks. Now I didn’t pick the 30% return number out of thin air – I picked it to mirror a legendary investor Peter Lynch, who was the manager of Fidelity’s Magellan fund, where he averaged about 30% annual return for 13 years. Let's see if we can get some wisdom from this legend. The first thing and something he has really stressed is: you're at an advantage. There are things you experience in your daily life that can help spark a stock idea. Be on the look out. Also most good investors tell you invest in what you know – and no one knows it like you do. Don’t invest in things you don’t experience or don’t know. So you have a good company in mind. That’s the spark. Now you have to do your research. Google that company, look at its growth, its financials, and it's balance sheet. Is its revenue quickly growing year over year? Does it have manageable debt? Does it have room for expansion – meaning is there a new product coming out, or is there a new market it hasn’t reached. Has it gone global? Peter lynch multiplied his money on Dunkin Donuts. Nothing fancy – he just ate their donuts and drank their coffee and thought it was really good. That was the spark – then he did his research and HW, saw it had a lot of room to grow and expand, new products – so he invested. Because prices will go up if the company expands, performance continues to improve, or its undervalue and not yet fully appreciated. Make sure the company checks these boxes. Other things Lynch looks for: it has a moat, competitive advantage, it has a niche with devoted customers. Another big tip – don’t be rushed. You can wait for more data, more financials, see that it continues to go the right direction. Patience and the long term play is also a virtue because downturns are common – expect them – take advantage of it. During the coronovirus recession, as soon as the market crashed in march, I immediately went on a spending spree and bought additional shares of great companies like apple, Microsoft, facebook, google, Tesla– things that had nothing to do with coronavirus because Every down market in history has been followed by a massive bull market, returning way more than what was lost. So those are some things to do, but what are some tings to avoid? "If I Could Avoid a Single Stock, It Would Be the Hottest Stock in the Hottest Industry." Many people get stock ideas from the news – things that have already made the rounds, prices are sky high. Jumping in now is dangerous – theres not much more room to go up, but a lot of room to fall. I didn’t invest in Nikola (NKLA) or whatever the newest hype stock is Honestly most people lose money on stocks because they do this. So there you have it. Some barebones and easy executable steps to achieve great returns. Disclaimer: I am not a financial advisor, do not listen to me for financial advice.