Over time, however, some plants do not like the environment and die off. Other plants love it and start to spread. Some plants are even invasive looking to choke off anything that gets in the way of their quest for water and nutrients. Some years the weather is perfect for your garden and some years you may experience a flood or drought.

Your Investment Portfolio

I still garden today at my own home. As the years have passed, I keep thinking that gardening is lot like building and maintaining an investment portfolio:

Start with soil and nutrients – the extra cash you have saved to start your investment portfolio
Put in a variety of different plants so you have blooms all summer – make investments in a diverse mix of stocks, bonds and mutual funds for diversification

Replace the struggling plants – Have a sell strategy when an investment doesn’t work out like you hoped
Prune back the aggressive plants – Re-balance your portfolio periodically by selling some winners that have taken over and buying some under performers

Take extra care of the garden during drought or flood – You must weather bear markets, hold steady and have some cash to make new investments at discount prices

Enjoy the beauty of what you have created. Watch your money grow and compound over time

This article was republished with permission from Dividends Diversify.

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