Capital Preservation At All Costs

The Darwinian theory of evolution, which signals the importance of adaptive survival strategies, underlines the most significant rule of engagement: self-preservation. Indeed, protection of what one possesses has been the prime driver of all functions, economic or otherwise, throughout the ages. In every sphere of human activity, at every level, self-preservation is the most dominant force. This is, for our purposes, especially relevant for investments. Preservation of what we have—capital, in all its forms—is our top-most priority. And not without reason. Investors normally do not wish to compromise what they have. The possibility of creating an edifice on the extant foundation is usually explored afterwards. Wealth accumulation, of course, is the ultimate destination, but that comes only when you are sure that your base is perfectly protected. An investor who takes capital...