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1 Lakh per Year (in 4 scrips) could achieve 1 Lakh Passive Income per Month after 20 Years!
What is Guard Band?
 

Let us see why HNIs use Guard Bands?

Investing is a risky arena, whether it is Fixed Deposits, Gold, Real Estate, Stocks.. After all we are receiving profits for the risk we take.. If there were no risks, there are no profits.

Guard Bands Strategy is used by HNI (High Net Worth individuals) to stay COOL while invested in high risky situations. For example you wanted to place 1 Crore in a potential multibagger expecting 10 times returns.  But at the same time there is a chance of your 1 Crore being eroded completely.  

So the profit chance is 1:10. Loss chance is 1:0.  Let us take the investment period as 10 years.

As you know Gold has 20% appreciation per year as per the history. You can cover your first investment with a covering using gold.

  1. Invest 50 Lakhs in Stock
  2. Invest 50 Lakhs in Gold
At the end of 10 years:

If your stock investment returned 10times return, you have 5 crores + 1 crore from gold

If your stock investment was eroded, you still have 1 crore from gold


GUARD BANDS MAKE YOU COVER HIGH RISKY INVESTMENTS WITH LOW RISK ONES.
Note: This should be employed in long term investments, Guard Bands can be Gold, Fixed Deposits, Other High Surety Asset classes


In the pure sense, this is a form of Diversification.