Why Long-term Investing Should be More Like Gardening, and Less Like Warfare

May 20, 2023 | by V. Henry Astarjian | Posted in Blog

Over the years, millions of pages have been written about the right way to invest. The range of investing advice spans the full spectrum from ultra-aggressive to sleepy-passive. For sure, there’s an  investing style suited for every person on the planet.

So it’s not earth-shattering news to say that lots of styles actually work. Even a cursory look at the greatest investors, traders, and hedge fund managers shows that there’s more than one way to turn a profit in the securities markets. 

We’re often told that investing is a lot like waging war, equating the strategies needed for successful investing with the strategies that great generals use in battle. There’s some validity to that. But a more helpful comparison may be with the simple act of gardening.

Why is gardening a more useful analogy for investing than waging war? For one thing, gardening causes much less stress than warfare.

Stress can be as harmful to a portfolio as it can be to the portfolio’s owner, the investor.

Stress anticipates bad outcomes, whether they are real or imaginary. In portfolio management, stress can lead to unwise decisions, often made hastily in response to expected calamities which may or may not materialize.

Gardening, on the other hand, is more gradual. It’s more organic in the sense that you plant something knowing what it is, how it might grow, to what height, and to what width. You know if it needs full sun or some shade. You know how it might look months or even years into the future and how it will harmonize with your other plantings. If needed, you can prune here, and cut there. If that doesn’t work, you can uproot the whole thing and choose another plant that works better.

In this way, you cultivate something of value that offers benefits for years to come, even to future generations.

Happy gardening. 

Disclosures: Waterstone Advisors, LLC is a Massachusetts registered investment advisor. Registration with securities authorities does not imply a certain level of skill or training. Investing carries risk of loss, including loss of principal. The information and data presented in this note have been compiled from publicly available sources that are believed to be reliable. However, their accuracy is not guaranteed. Waterstone Advisors LLC does not guarantee the performance of the securities or strategies discussed or analyzed in this note. An investment in these securities or strategies may result in complete loss of principal. For additional information and disclosures, please see our ADV Part 2 (the “Firm Brochure”) in the Our Approach page of our website at www.waterstoneadvisorsllc.com, or contact us at 978-828-2188.