Thread by @IamMisterBond

As @meetdharam has put it: Expensive Valuations:
Rs.100 in Debt @5% = 105/1 year
Equity corrects 50%
Cheap Valuation.
Switch from Debt to Equity
Rs.105
Markets go up 50% = Rs.157.50

Expensive Valutions
Rs.100 in Equity
Equity corrects 50% = Rs.50
Markets go up 50% = Rs.75

1st Investor protected downside, with no drawdowns. Started with a higher base of 105.

Switched to Equity & participated in full Upside of 50% rally thereafter

Final value Rs.157.50

2nd Investor held onto to Equity at Expensive valuations with 50% drawdown and no downside protection.

On corrections, value came down to Rs.50

Participated in 50% rally thereafter- but was only recouping his earlier losses

Final value Rs.75

Lesson: Invest in debt and wait for correction

During correction invest in equity

Till you wait for correction, your 100 earns debt returns

Waiting patiently in Debt despite a raging equity market is always better than succumbing to greed

In investing not falling is more important than rising.

Good equity returns are generated only after a fall and few good years therafter - which creates long term wealth creation stories

In between funds move from impatient to the patient Investors

And these are basic Pillars and philosophy of my Smart Investment Solutions: Downside Protection and Being in Right Aseet Class at Right Valuations.

Investors must ensure least erosion of their hard earned money. They would have saved this by sacrificing on lot of their dreams and aspirations.

Warren Buffet's 2 Rules of Investing:
1. Do not lose money
2. Do not forget the 1st Rule