I’d like to piggyback somewhat on Jeannette’s video last week and share a story I recently heard at a funeral service for the Grandmother of a dear friend. The priest spoke personally about spending a great deal of time as a young child on his grandparents’ farm. Around age 6, his grandfather carved out a small corner of the family fields for the grandson to grow whatever he wanted. Very excited, he took some corn and bean seeds from his grandfather and learned how to properly sow the seeds.
The boy was diligent in the care of his plot of land and watered regularly. In fact, he was so concerned about making sure he was doing everything he could to help his seedlings grow that he’d wake up at 6 am each and every morning to dig up the seeds and see what kind of progress had been made. This led, for obvious reasons, to many disappointing mornings as the seeds just would not grow.
This went on for about a week or two until finally, one morning, the boy found his grandfather waiting. He sat his grandson down and said,
“The farmer’s job is not to take care of the seeds. The seeds know what to do and, if they don’t, there’s nothing we can do about it. So much depends on the sun, wind, rain, etc. The farmer’s job is to take care of the soil, the care and quality of which is the only thing that can be controlled.”
As my blogging history will show, I’m a sucker for a good analogy when it comes to investing and this opportunity was not lost on me. When we invest in stocks, we don’t waste time trying to select which company will outperform the other. Companies take the money we invest and use their expertise to develop new and innovative products, grow their businesses and, in turn, pay us a fair return for the risk we take in providing them with the means to do so. Whether they’re successful or not is dependent on so many factors, none of which are in our control. Our job, instead, is to sow as many seeds, or invest in as many companies as we can at the lowest possible cost and then make sure the soil around them is cared for and nurtured to the best of our ability.
The soil, in this case, is many things. First and foremost, it’s thoughtful rebalancing. Making sure our seeds and plants are cared for, watched closely and pruned as needed to spur more growth. The soil can also represent having the proper tax planning, estate planning, insurance coverage and other important items in place to meet our needs.
Managing the soil and leaving the seeds alone to do their job takes discipline and a great deal of patience, especially when there are so many tools available to monitor our seedling investments and more and more ways to get a multitude of “expert farmer” opinions on how best to pick the right seeds.
But the rules of farming, just like the rules of investing, haven’t changed. Plant your seeds, do everything you can to make sure the soil is as rich as it can be, adjust and prune as needed, exhibit extreme patience and you’ll be rewarded when the time comes to harvest.
Have a great week and start to your fall!