Solid Analogy to Investing (Patreon)

Farmer = Investor

Crops = Investments

Weeds = Crummy Stocks and $hitcoins

Weather = Volatility 

So much here to dig into - but here is the high level view

• Do your research. Just like a farmer would research the best crops to plant in their soil, investors should research the best companies to invest in. This means looking at the company's financial statements, management team, and industry outlook.
• Invest for the long term. Farmers don't expect to harvest their crops overnight. They know that it takes time for crops to grow and mature. Similarly, investors should not expect to get rich quick. They should invest for the long term and focus on compounding their returns over time.
• Be patient. There will be ups and downs in the market. Just like farmers face bad weather and pests, investors will face market fluctuations. It's important to be patient and not panic sell when the market takes a downturn.
• Diversify your portfolio. Farmers don't put all of their eggs in one basket. They diversify their crops to reduce their risk. Similarly, investors should diversify their portfolios to reduce their risk. This means investing in a variety of different asset classes, such as stocks, bonds, and real estate.
• Rebalance your portfolio regularly. As your investments grow, you'll need to rebalance your portfolio to make sure that it still meets your risk tolerance and investment goals. This means selling some of your winners and buying more of your losers.
• Be prepared for the unexpected. Farmers know that they can't control the weather, but they can prepare for it. They have a plan for what to do if there is a drought or a flood. Similarly, investors should have a plan for what to do if the market takes a downturn.
• Don't be afraid to take calculated risks. Farmers take calculated risks when they plant crops. They know that there is a chance that their crops could fail, but they also know that there is a chance that they could be very successful. Similarly, investors should take calculated risks when they invest. They should not invest in anything that they don't understand, but they should also be willing to take some risks in order to achieve their financial goals.
• Have faith in your plan. Farmers have faith in their plan when they plant crops. They know that they have done their research and that they have chosen the best crops for their soil. Similarly, investors should have faith in their plan. They should not panic sell when the market takes a downturn. They should stay the course and trust that their plan will eventually work out.