Is investing like gardening?
Source: Johnny’s Selected Seeds
Both require planning. Both encourage diversification. In both cases, time is your friend. Successful investors and gardeners look past their current circumstances to discern the underlying trends. And both have to watch out for pests and poachers who can steal what you’ve cultivated.
With a garden, the pests can be bugs or weeds or even grazing animals that raid your plants just when they’re starting to bear fruit. Most folks who garden close to nature can tell stories of deer or raccoons or even wild turkeys who decide our plot is a great place for a picnic.
Some poachers in the investment world include managers who don’t take their fiduciary duties seriously, mutual funds with excessive fees, brokers who use our order-flow to position their own trades, and even an investor’s own hopes and fears. Emotions can get in the way of investment success—fear when markets are falling; greed when they are rising.
But the biggest obstacle to success in both gardening and investing is procrastination. The sooner we start, the sooner we see results. Just know what the goal is. Tomatoes are lovely, but usually not as a centerpiece. If you need your money soon, stocks can be volatile.
Investing and gardening are both rewarding. But a flower-bed won’t start itself. Go plant!
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!