John Bogle’s enduring wisdom and the trouble with mutual funds

Back in the 1980s, stock picking gurus such as Peter Lynch at Fidelity offered small investors a strikingly simple mantra: “Invest in what you know.”

The idea was intuitive and highly attractive for a number of reasons. Essentially, if you noticed a small coffee chain with a line out the door, you bought that stock. If you worked in the aerospace industry, all the more reason to buy stock in your own firm.

Lynch made his clients a lot of money, of course. But buying what you know wasn’t a winning strategy for all investors. Someone bought stock in an industry that has since ceased to matter.

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