Peter Lynch, one of the greatest investors who has ever lived, said: "In this business, if you're good, you're right six times out of ten. You're never going to be right nine times out of ten."
Below I'll show you why he believed ordinary people, like you and I, could beat the market, but first…
Did you know $20,000 invested today at 12%pa will turn into $35,000 in just five years?
Boring…
But did you know that after 50 years it turns into $5,790,044. Now that is nothing to sneeze at.
Many of my fellow investors and colleagues tell me their biggest investing mistake was that they didn't start earlier.
That's because time allows us to make our money work for us.
Waiting till the kids are at school, you've moved into your new house or for the market to crash (so you get better prices) is a fool's errand.
It's time in the market which is important, not timing the market.
By setting aside a small monthly amount and adding it your Australian stock portfolio, you too can set yourself up for a much wealthier retirement which could enable you to take the holiday you've always dreamt about.
For example if you have $20,000 to invest, 25 years until you'd like to retire, can afford to put $500 per month into your stock broking account and achieve the market's historical average annual return (12%pa) you'd be retiring with an extra $1.14 million in your pocket.
Stocks to get you there
Of course, it's not easy to beat the market. However armed with time and a simple investing strategy, you too can start making your money work harder, thus putting the odds of a richer retirement on your side.
So what stocks should you choose?
I can tell you right now, companies like Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS) and Westpac Banking Corp (ASX: WBC) will find it very difficult to grow at 12%pa for the next 25 years, so we've got to look for growth stocks. If they pay a dividend it's even better!
Companies like Slater & Gordon Limited (ASX: SGH) and Ardent Leisure Group (ASX: AAD) – owner of Dreamworld, WhiteWater World, Goodlife health clubs and much more – are two which appear to have very bright futures ahead.
