Money Mind | Nitesh 📈

Understanding Financial Asset Rotation (Part 1). A Timeless Lesson for Every Investor. Financial assets don't move in a straight line. They move in rotation. Opportunity > Optimism > Narrative > Euphoria > Correction > New Opportunity . The asset class changes. The narrative changes. The cycle changes. But the pattern remains the same. The post-COVID period (2020 - 2026) has perhaps been the clearest demonstration of this timeless pattern. Like many global equity markets, the Indian equity market also recovered strongly after COVID. Between 2021 and September 2024, however, it emerged as one of the world's best-performing major markets, with countless stocks turning into multibaggers. The narrative -India being the world's fastest-growing major economy -was true. But as valuations became richer, optimism gradually turned into euphoria, and investors needed to moderate their return expectations. Market leadership then began to rotate. Real estate gathered momentum. Crypto became the next market darling. Narratives such as digital gold, institutional adoption and a new financial system dominated conversations. Retail participation surged. Optimism turned into euphoria before volatility reminded everyone that no trend lasts forever. Gold then rallied , reinforcing its status as the preferred safe haven asset. Silver followed with even greater intensity. Narratives around AI, solar energy and electrification became increasingly popular. The themes were genuine, but eventually the narrative became larger than the valuation. Euphoria was followed by a sharp correction. Industrial metals such as copper, aluminium and zinc became the next favourites. Electrification, infrastructure, energy transition and AI-driven demand became the dominant themes. Once again, optimism grew, valuations expanded, and these markets have now started softening. The AI revolution then created another powerful wave. Technology leaders, semiconductor companies and markets closely linked to that ecosystem -particularly the US, Taiwan and Korea - became the new favourites. This leadership too will eventually rotate . Different asset classes. Different narratives. Different cycles. Same pattern. Different outcome for investors. A good opportunity creates optimism. Optimism creates a narrative. The narrative attracts more participants. Participation fuels euphoria. Euphoria is followed by correction. And every correction quietly creates a new opportunity.

It took me 10 years to build a 1Cr portfolio. Today, one of my portfolios is up close by 1Cr in a single trading day. Honestly, this is surreal. Last 3.5 years have gone into experimenting across different markets, building better investing strategies. One key learning has been -- that maybe I would not even need to withdraw even 50% of my invested amount ever. So generating cash flows from such portfolios become extremely critical. Hence, I have been selling Put Options on close to 30% of portfolio value. This pretty much takes care of all my expenses. Would highly recommend doing this on high quality stocks.