Working out is good for your health, but it can also be good for your portfolio if you want to invest in the fitness industry.
Warren Buffett’s famed advice to invest in what you know has alternately inspired and haunted do-it-yourself investors for decades. Like most words of wisdom, it’s been both misattributed and misinterpreted.
It was actually Peter Lynch, former manager of the Fidelity Magellan Fund, who said “invest in what you know.” But what he meant was not how many investors interpreted his advice.
“Most people think of ‘what you know’ as being experts in that product,” says Chicago-based John Rekenthaler, vice president of research at Morningstar. “I know a lot about coffee, so I’m qualified to talk about Starbucks (Nasdaq: SBUX). I’ve been to many gyms and am involved with fitness, so I know the fitness industry.”