Curious Case of the Chinese Bamboo

November 10, 2018

I was at a young client’s office last week, we had been helping him do mainly Systematic Investments over the past 12 months…the young man appeared distraught. His portfolio after 12 months of investments showed a small loss. He told me that he felt that even keeping his money in Savings account would have fetched him a better return than the loss he incurred whilst doing the SIP. I could completely understand the perspective of the young man...especially since this was his first real investments and somehow it wasn’t at all going the way he imagined it would. I could distinctly remember about 2 decades ago... I was not too different either.


However, during the past two decades, whilst I have gained considerable knowledge and experience in investing and personal finance, the most important learnings have come to me away from the investment world especially to be found in the world of nature.

 

I was presented a small Bamboo sapling about a decade ago at an event which I represented as a speaker. Needless to say, I came back home and dutifully planted it in a small garden patch at my home and continued to nurture and water it. Every month, I expected that it would grow into a bigger plant. Thereafter a small tree and then a big bamboo tree. However, to my utter disappointment, I discovered that month after month the plant appeared the same. I think it was the same way for close to 3-4 years... I had almost given up on the seeing any growth in the Bamboo... however I was aware that the plant was alive since it was green. 


Then one week, I was out on travel and did not notice the plant. When I returned it was a meter high… from less than 15nch plant that I had left it a week earlier. From then on and on it grew at an astounding pace, growing sometime by a metre or two every day, until it reached a height of 80 feet, taller than my three-storied apartment. Then I realized the truth that we often miss. That the small plant spent all these years in developing strong roots so that it can support the Bamboo when it is 80 feet tall.


Similarly, SIPs are long term products that in the short term may reveal poor results... but leave them be and they continue to stay the course. And believe me that one day you will find the value of your investments will be many times of what you invested. 


But it takes time. So why don’t you give your investments some time to grow like the Chinese Bamboo.

 

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