Why 50% Down requires 100% Up?
One of the most dangerous misconceptions in investing is that losses are symmetrical to gains. They are not. If you lose 50% of your capital, you don't need a 50% gain to recover—you need 100%.
The Recovery Trap
| Loss % | Remaining Capital (from ₹1L) | Gain Needed to Recover |
|---|---|---|
| -10% | ₹90,000 | +11% |
| -20% | ₹80,000 | +25% |
| -50% | ₹50,000 | +100% |
| -90% | ₹10,000 | +900% |
Hedging prevents these deep drawdowns. By capping your loss at 5-10%, you ensure that you never fall into the "Recovery Trap", allowing the magic of compounding to work uninterrupted.