Planting a tree of health, wealth and Happiness through Equity Investing
Ever wondered how a tiny seed grows into a tree? Well, there are many factors that come into play while sowing a seed and post the seed is sown, it is nurtured to ensure it grows to become a tree.
Isn’t investing in Equity also such a process? Today, let’s have a look at how the tree planting process resembles the process of Equity Investing?
- Checking the Land Fertility and Risks associated with it:
The first step for tree plantation is to check the suitability and fertility of land, the risks of insects, animals and birds damaging the growth of trees, the climate change and its suitability to crops.
Investing in ordinary shares also demand research regarding an investor’s own risk bearing capacity, financial goals, risks prevailing in the market at a given time, investor’s reaction to major volatile times etc before investing.
- Starts with sowing a tiny seed:
After checking the suitable factors as mentioned in point 1, the farmer starts sowing seeds according to his need and land as well as climate suitability.
Investments in equity shares also start with small amounts, in line with the financial goals and the risk-bearing capacity.
- Farming with the help of Bullocks:
Bullocks are a farmer’s best friend. Once the seed is sown, a farmer with the help of bullocks, farms the land and ensures that the seed sown, grows properly.
An Equity Investor as well, with the help of a professional adviser or a financial planner or self-driven takes care of investments over the term till maturity of investments.
- Monitoring the crop from time to time:
A farmer monitors the crop from time to time to see that the change in climate, insects, animals etc do not damage the growth of the plant and takes appropriate steps if any adverse situation is discovered.
A common stock investor as well checks the investment portfolio from time to time and does rebalancing activity according to the market movements and volatility.
- Long-Term Vision:
Sowing a seed to growing a tree is a long-term process. It takes days, months and years to grow a tree and reap the fruits out of it.
Common stock investor also has a long-term view in mind, he gives time to the markets as well as his investment to grow as expected over the years.
- Effect of changes:
As discussed in point 5, long term vision is essential to reap the sweet fruits of the seeds sown. Due to the long-term perspective, the negative impact of climate change, less rainfall, etc is removed over the positive impact.
Ordinary stock investing as well, removes the negative impact of inflation, bear-runs and crashes in the market as well as market volatility. In fact, equity is the best asset class to beat inflation and generate excellent returns over long-term.
- Reaping the Fruits once the seed becomes a tree:
Over the years when the seeds sown, grow to become a tree, it is the time for the farmer to reap the sweet fruits out of it for consumption as well as sales, which result in both – health and wealth.
Common stocks also mature over the years if wise and discipline investments are made. Once they mature, the result is achievement of financial goals which were set forth, wealth for generations and happiness for all.
Thus, Equity Investing is a process that demands patience, perseverance and vision for strong foundation and a prosperous future.