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Lynch still confident
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September 3, 1998: 8:17 p.m. ET
Investment guru says financial literacy is key to finding success
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NEW YORK (CNNfn) - Lots of investors may have been frightened by this week's wild market ride, but one market guru isn't that nervous.
Fidelity Investments' Peter Lynch said the stock market remains a good place for the long-term investor to put money.
"Since World War II, we've had nine recessions, three wars... we've had a lot of ugly things. However, corporate profits have gone up 52 fold and the stock market 60 fold. Someday the market was going to go down -- this is the week," he said.
After building Fidelity Investments' Magellan mutual fund from $20 million in assets to $14 billion, Lynch is now hitting the education trail.
Lynch, the vice chairman of Fidelity Management and Research who turned over the reigns of Magellan in 1990, has turned pitchman of sorts as the spokesman in a new series of television spots stressing investor education.
In addition, he also gives regular seminars stressing investor education is the only way to succeed in any market.
Appearing Thursday on "Moneyline News Hour with Lou Dobbs," Lynch said it's much more important for investors to be educated about the markets today because they have to make more of their own decisions.
Lynch said if an investor can't explain what they're invested in 30 seconds or less, they won't do well.
"Ten or 20 years ago, people retired and would get 50 percent of their last year's salary and didn't have worry. Now, you have to take care of your own money, but education hasn't improved very much.
"People don't learn about stocks and bonds in school. You have to learn it for yourself. Some people don't know the difference between an emerging growth fund and an emerging market. You can't just delegate it to someone else," he said.
The difficult thing about investor education, Lynch said, is there is no "one size fits all" solution. It all depends on your personal goals.
"It's like going to a restaurant. You can't tell people what they should do. Someone may be aggressive at 63. I think people should be comfortable and do their own research. They should know the difference between blue chips and emerging markets," he said.
Despite the market dips that have grabbed headlines in the past week, Lynch said there's still plenty of good things happening worldwide.
"People were writing off California a couple of years ago, now they have a massive surplus. Canada is running its first surplus in 20 years and Mexico is doing well," Lynch said. "Wouldn't you have been shocked if someone told you that the U.S. would have been running a surplus?"
Lynch said Japan is the biggest current weak spot, but he believes the country is strong enough to overcome its weak economy.
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Fidelity Investments
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