What Cicadas Can Teach Us About Investing Philosophy

I’m in Western Maryland. I’m running in the woods behind my parents’ horse farm. It’s muggy and hot, but the terrain is such a good workout, and since it’s a welcome break from the flat Indiana landscape I usually encounter  on a run, I really don’t mind.  

This isn’t the first time I’ve gone on a run at the farm, but today is different. This morning, the cicadas are singing. Loudly. They mingle in the trees, and so they’re much louder in the woods than they are around the house, which sits on the top of a knoll overlooking the pastures and barns, where horses bob their heads to avoid the flies, tails swish and stamping and sneezing can be heard, mingling with the distant sound of the cicadas’ song.  

Here in the woods, it’s much louder, more prevalent, more intense. It makes me pause and think about the cicada’s life cycle. How these animals have been lying in wait for 17 years. And all at once, I’m struck by the idea that we as humans could learn a lot about investing from the cicada.  

Learning investment philosophy from a cicada might seem like a far-fetched idea, but allow me to explain. 

The Brood X Cicada has the longest life cycle of any insect; 17 years. From the time the eggs are laid in a tree (up to 600 per adult female!), until the next generation lays their eggs, there is a LOT of waiting. The eggs are laid in the trees, and 6-10 weeks later, they hatch. The larvae drop down to the ground and burrow about 1-2 feet into the soil, on a mission to find tasty roots to feed off of for the next several years. When their internal clock tells them it’s time, they push their way up to the surface, molt one more time, and begin their search for a mate so they can continue to perpetuate their species.  But what happens between this generation’s eggs and next generation’s success requires an enormous amount of trust. 

It reminds me a lot of the way we recommend young people invest their money.  When I speak to young clients, my focus is always on instilling this idea that the best time to save for tomorrow is yesterday. We want our young people to put as much of their money away as early as they can. We want them to lay as many investment ‘eggs’ as possible. Then we have to feed those eggs by continuing to provide them with supplemental nutrition in the form of annual contributions. 

If we invest in this way, when it’s time for those long-awaited mature investment portfolios to climb up out of the ground and go to work by providing us with an income, we want them healthy and robust, so that their success is guaranteed.  But again, investing in this manner requires an enormous amount of trust. We have to believe that what has happened over long spans in the past will continue to happen into the future. Sure, some of the ‘eggs’ may not be successful. There will be losses. But the more eggs you establish, the more likely you are to see success in the future. Of the investment eggs that don’t die, some will be amazing!  Some will be average, and some will be stunted. But of the ones that survive, we have to trust that after all that waiting, the aggregate will be in the positive. 

Lots of insects go through a period of waiting. Butterflies come to mind.  My daughter’s first grade teacher gave her a book called The Impatient Caterpillar as a gift at the end of the school year. It’s a brilliant children’s book, with fabulous, colorful illustrations that hold a child’s attention, and a character that makes you giggle on every page.  But the message was what pleased me the most, because it’s all about the idea that patience pays off. To a child, 2 weeks in a chrysalis sounds like an eternity. Imagine their reaction when I suggest that they take that money they just earned and put it away for 70 years. Umm, what?  Lady, you’re out of your mind.  

But as children grow and mature, they can understand and accept this concept more and more if you continue to preach it with regular intention. Which brings me back to my metaphor about this year’s batch of cicadas. What sets this brood of cicadas apart is the sheer length of time they wait. The species is patient, they trust that the eggs they laid will hatch, feed, grow and mature, so that when it’s time for the next generation to do their work, they’re ready.  

Investments are really no different. We put money in, we leave it for a long time (the longer the better!), and when we get ready to retire and put that portfolio to work, we hope that it has done the heavy lifting so that we have what we need to live, travel, spend, and set up the next generation for success. And so it goes in perpetuity. Many of you were probably wondering why you were reading a story about cicadas on a financial planning blog, but I hope that now, you can look at this strange, awkward little bug through a different lens, and I hope it inspires you to trust that your little investment eggs will grow into fully-fledged, adult portfolios with robust features and healthy returns.  The more eggs you lay, and the longer you let them mature, the more likely they are to perpetuate your wealth over time.  

Keep saving, and have a great day!