Autumn has always been one of my favorite times and not just for the colorful palette in nature. To me, it’s always been the return of many exciting “seasons”. It’s football season, festival season, for some hunting season, and for all the approach of the holiday season. For a time, I worked in agriculture and welcomed the celebrated harvest season, when risks finally bore out the rewards of reaping what was sown and tended. On a recent trip through south Alabama, I passed many fields, some recently harvested, some nearing maturity, and I reflected on how a prudent investment strategy resembles the annual cycle of planting, nurturing and harvesting.
How can we align the lessons of agriculture to your investment strategy?
Being a good steward over investments is a lot like an orchard keeper faithfully tending the orchard. Once planted, and tended well through good and bad times, the regular harvest sustains and prospers the orchard keeper for many years. If properly planned, many generations will benefit while creating a blessing for others besides.
This very simple philosophy of creating regular harvest opportunities in a portfolio, called cash flow investing, has been somewhat hijacked in the last few decades by the concept of “growth” investing. Interestingly some investors are willing to trade off steady cash flows for the allure of bigger, yet more uncertain, “gains” over the long run. The concept of stewarding surpluses should cause us to take pause at the idea of this trade-off. A steward may weigh prudent risks/return tradeoffs but should certainly seek to eliminate as many unknowns as possible. An increase in one’s time horizon doesn’t mean one should speculate how markets will behave or even arrive at a certain point.
My good friends and colleagues at Camelot Advisors, who provide 95% of investment management for my clients, specialize in cash flow investing. I hope you will take time to watch this related video about the ideas I’ve shared. For those clients who allow myself and Camelot the privilege to continue to help you steward the surpluses you have entrusted to us, we thank you.
“This material is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. Camelot Advisors can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.”
“Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio.”