Peter Lynch is perhaps one of the most famous mutual fund managers in recent memory. A thousand dollars invested in the Fidelity Magellan Mutual Fund when Lynch took over the fund’s management in 1977 was worth $28,000 in 1990, when he retired. “That’s great for him,” you’re thinking. “But how could I, a stock market novice, ever hope to compete with the likes of a Peter Lynch?”

Lynch was kind enough to share his secrets — which turn out to be quite simple, actually — in his best-selling books, One Up on Wall Street and Beating the Street. His top words of advice? “Invest in what you know.”  In fact, some of Lynch’s top investments have been in the companies whose products or services he or his family uses on a regular basis, like The Body Shop, Wal-Mart and Toys “R” Us. To read what Peter Lynch has to say about the current status of the stock market, including his commentary on the September 11, 2001 attack, click here.

Paying a little extra attention during a trip to the mall, a favorite restaurant or clothing store could be your first step in finding a great company to invest in. In this section, we will look at the four steps you’ll need to take as you begin to research potential investments.

Evaluating Companies