Trees and Portfolios

I'm no arborist, but I have learned a few things about taking care of trees over the years. And interestingly, there's more than one parallel between taking care of a tree and taking care of our investments. 

It takes a long time to grow. 
Trees don't grow much over night - but over the course of a few years, and few decades, what starts as a seedling becomes something else entirely. We don't measure the tree every day to see how much it's grown. 

You don't dig up it up routinely. 
It doesn't make sense to dig up a tree to check if its root are still there, and it doesn't make sense to overly disrupt our carefully selected, beautifully allocated portfolio more than is needed. 

Pruning can be good. 
While we don't dig up the roots, we do prune the branches. Just as in a portfolio, routinely reshaping the portfolio back to it's original design makes sense as different parts of it grow at different rates. 

Seasons are natural. 
During some seasons, the tree might not grow, it might even look like it's dying. But this is the natural cycle. Same with our investments - there will be times when things look dire, and there will be seasons when it seems the growth never stops.

Professionals can help.
With my admitted novice arborist status, last year I enlisted the help of a local expert to figure out why our green giant trees weren't growing as much as they should. He identified the fact that each one had multiple "leads" and simply snipped off one of them for each tree. They've since taken off in growth. 
Interesting Resources

Things Predictive of Wellbeing
1 minute read | Dr. Daniel Crosby (Twitter)
I pressed Dr. Crosby for his sourcing on this, and he said it was sourced from a variety of places but based on a current psychology project. What's most striking about this list is how it relatively flies in the face of what most of us - and our culture - thinks will make us happy. 
Even God Couldn't Beat Dollar Cost Averaging
Total: 9 mins; Summary: 2 mins | Of Dollars and Data
With the markets at (or near) all time highs again, I thought it'd be beneficial to include this piece that I've included several times in the past. It's one of my favorite looks at how something that seems to make sense - waiting for the market to dip, or even crash before investing - actually doesn't hold up when compared to systematically buying into the market. The reason is that while we're sitting on cash waiting to invest, the market keeps churning upward - and might continue to do so. Even if you knew the exact day to buy - the market low-point - you'd only outperform dollar cost averaging 30% of the time. And since no one can know the exact day, if we extend this time period to two months of the low point and buy then - the chances of out-performing drops to 3%. 
I hope those of you with kids - and maybe even those without - had fun with Halloween last night, and I wish you a celebratory All Saints' Day today as we speed towards the end of another year. 

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