Peter Lynch, by managing the Magellan Fund, achieved a 29.2% annual compounded return in dollar terms and grew the fund from $18 million to $14 billion.

Here are 10 Investment Lessons from his own words:

1- Don't Buy What You Don't Know

Peter Lynch states that you must know very well the reason you are buying a stock. He always says: "If you can't explain to an 11-year-old in less than 2 minutes why you own a stock, you shouldn't buy that stock."

2- Don't Try to Predict the Economy

According to Lynch, trying to predict the economy or interest rates is pointless, and making macroeconomic forecasts is a waste of time. What matters are the companies. Companies plan their futures according to the economy.

3- Be Patient

Be patient when both buying and selling. If you don't buy now, you won't miss out. Investing is a long-term game. Even if you had bought Walmart (the US retail giant) 10 years after its IPO, you would have increased your money 30-fold.

4- Great Stocks Are Everywhere

Don't be biased towards certain sectors or companies. Even in bankrupt companies, there can be great opportunities. Don't be stubborn and limit yourself. Look at even the so-called "boring" companies.

5- When to Sell?

Make sure you write down why you are buying a stock when you purchase it. If those reasons are no longer valid, you can consider selling.

6- Stocks Can Always Go Lower

A falling stock can fall even further. Just because a stock's price has dropped a lot does not guarantee that it will rise again.

7- Stocks Can Always Go Higher

Just because a stock has risen a lot does not mean it cannot rise even more; if its balance sheet is good, it can rise further. You don't have to sell a high-priced stock immediately.

8- Price Decline Doesn't Mean You're Wrong

In the short term, stock prices are affected by emotional and instant market movements. Think long-term.

9- Stocks May Not Recover Over Time

Not every stock may recover after a decline; it could take a very long time to reach your cost basis. Evaluate the risks well.

10- Diversification is Important

Diversify your investments. Putting all your money into a single stock is risky. There might be things you don't see.

Peter Lynch, by managing the Magellan Fund, achieved a 29.2% annual compounded return in dollar terms and grew the fund from $18 million to $14 billion.

Here are 10 Investment Lessons from his own words:

1- Don't Buy What You Don't Know

Peter Lynch states that you must know very well the reason you are buying a stock. He always says: "If you can't explain to an 11-year-old in less than 2 minutes why you own a stock, you shouldn't buy that stock."

2- Don't Try to Predict the Economy

According to Lynch, trying to predict the economy or interest rates is pointless, and making macroeconomic forecasts is a waste of time. What matters are the companies. Companies plan their futures according to the economy.

3- Be Patient

Be patient when both buying and selling. If you don't buy now, you won't miss out. Investing is a long-term game. Even if you had bought Walmart (the US retail giant) 10 years after its IPO, you would have increased your money 30-fold.

4- Great Stocks Are Everywhere

Don't be biased towards certain sectors or companies. Even in bankrupt companies, there can be great opportunities. Don't be stubborn and limit yourself. Look at even the so-called "boring" companies.

5- When to Sell?

Make sure you write down why you are buying a stock when you purchase it. If those reasons are no longer valid, you can consider selling.

6- Stocks Can Always Go Lower

A falling stock can fall even further. Just because a stock's price has dropped a lot does not guarantee that it will rise again.

7- Stocks Can Always Go Higher

Just because a stock has risen a lot does not mean it cannot rise even more; if its balance sheet is good, it can rise further. You don't have to sell a high-priced stock immediately.

8- Price Decline Doesn't Mean You're Wrong

In the short term, stock prices are affected by emotional and instant market movements. Think long-term.

9- Stocks May Not Recover Over Time

Not every stock may recover after a decline; it could take a very long time to reach your cost basis. Evaluate the risks well.

10- Diversification is Important

Diversify your investments. Putting all your money into a single stock is risky. There might be things you don't see.