Thread by @IamMisterBond

Investors have short memories and wish to dissect market phases based on what suits their sensibilities.

Current hot topic of discussions on Social Media:
How Mid and Small Caps have delivered stupendous returns since March 2020

What they have conveniently forgotten is their recent past experience of investing in Mid & Small Caps from Jan 18 to Dec 19 and till Mar 20

Above table shows entire journey of same Indices over different time periods vs 2 popular DAAF schemes and vs Smart Solution of MisterBond

Many have questioned our exit from Equity in July 2020(after entries in March 2020):
As @morganhousel has mentioned in his book:
It is not being conservative but creating Margin of Safety. This raises odds of success at a given level of risk by raising your chance of survival

It would have been extra conservative if one had invested in Liquid with 3% returns vs 100% in Equity.

My strategy has delivered from July 20 to May 21, 50% +/- returns vs 100% in Equity and currently sitting on 40-50% cash

Again as @morganhousel has put it:
No one wants to hold cash in Bull Markets. But if that cash helps you not to sell your stocks at huge loss in bear market - holding that cash is worth it

So my suggestion is do not look at returns in different Indices in isolation but as a larger picture and journey. Correlate with current fundamentals

Do not get trapped in same situation like 2018 when most Investors invested in Mid & Small Caps based on past 1 year performance

Investors conveniently forget teachings of legendary investors like #WarrenBuffet in Bull Markets and remember them in Bear Markets:
1. Rule No 1: Do Not Lose Money, Rule No 2: Do Not Forget Rule No 1

2. Be Fearful when other are Greedy and Greedy when others are Fearful