The Beginning Investor's Kit

Wondering what stocks to buy? Take a tip from investment guru Peter Lynch, former manager of Fidelity's Magellan Fund.

Open your eyes and look around. As ThirdAgers, you and your peers have fueled the growth in real estate. You have been buying big ticket items like household appliances, cars, and more for decades. Odds are that you have growing discretionary income and you use it to buy quality products and services. In short, you know what you like and you spend money for what you need and enjoy.

Right Under Your Nose
So when you're considering stocks to invest in, consider companies that deliver goods or services you or your friends regularly use. Your observations as a consumer can make you a pretty good analyst.

For example, consider the airline you regularly fly. How's the airline's on-time arrival and departure for you? Are the seats full? How's the counter service? Do the routes and schedules meet your needs?

Take it a step further. What type of planes do you ride on? Is the airline adding more of them to the fleet?

If you have the opportunity, ask the flight crews and ground crews questions about the airline's operations, equipment, and suppliers. Their answers and your own observations may convince you to do what Lynch suggests: buy the company by buying its stock.

Don't rush out and make it part of your portfolio without looking further into the company, however. Make sure the company has solid fundamentals, like minimal or no debt, strong earnings and sales, and leadership in a growing industry.

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