Which is the best investment philosophy?

Question

Peter Lynch's way to invest is to find the best companies by studying the companies you know best. Warren Buffett like the buy the companies he likes and keep them forever. Which way is a better way?

Answer 1

I personally like indexation. Buy broad based index funds, hold them for at least five years, and reap the benfits of the economic cycle.

Peter Lynch and Warren Buffet are the exception, not the norm. Most fund managers under perform the stock market averages.

There are strategies that tend to yield higher returns over time, such as investing in small cap value stock exchange traded funds. But general stock picking ala Peter or Warren would be hard to replicate for the individual investor since he (or she) would not have the research resources nor the institutional connections (read: deal discovery and due diligence provided by the top investment banks to their top clients) need to compete with the top mutual fund managers.

Indexing is a bit boring. But low management fees and tax efficiency greatly aid your returns over the long run.

Answer 2

Warren Buffet is not a buy and hold type of guy. Most of his money was made in PIPES which basically is guarenteed money. He gives money in exchange for stocks and if they didn't do well, they are paid as bonds at a contracted rate. He has only held on to four or five stocks. Buffet's real philosophy is insurance and that's now the main business he is in.

I would give it to Peter Lynch, although that advice is for the common man. He would actually hold around 1,200 stocks at any one time, which would make it really hard to actually know or keep track of all those companies.

Answer 3

I normally wont do this but i will this time.

I have to say you're all wrong.

The only correct way to answer this is to say that the best investment philosophy is completely up to YOUR OWN PERSPECTIVE - both of these powerful and wealthy men use different investment methods based on their own personalities and education.

So - if your personality best matches how buffett thinks, then that would be the correct answer.

How to find out the correct answer? im sure both of them have books which will let you get into their personalities a lot deeper and you will identify with them like i do with robert kiyosaki, and then you will figure out which is the best investment philosophy.

Answer 4

Whichever you feel most comfortable with - it's never the buying of stocks that's the complicated part - anyone can buy - it's selling at the right time - even Warren Buffet doesn't keep stocks 'forever'...

Answer 5

Invest in what you know. If you don't know anything about something--study. It's the safest and most universal decision-making philisophy. And the next level of that is, keep on studying because man was made to learn.

Answer 6

Real Estate (property) is the best and safest investment.

Goodluck,
Saqib