What is the investment mantra from Zerodha CEO and founder, Nithin Kamath? In an exclusive interview with FinancialExpress.com, he shares his message for new investors, the common mistakes and the asset classes he favours.
Here is the full transcript of the exclusive interview-
Zerodha perhaps attracted the largest chunk of first time investors post the pandemic. From what you have seen, what are the biggest mistakes new investors made?
It’s all the same mistakes that most investors make, like overtrading, investing in penny stocks, lack of diversification, and being too short-term oriented.
Post the market sell-off, how has the behaviour of these new investors changed? How does it compare/contrast with the more experienced investors?
Again, all investors are more alike regardless of their age. Whenever new investors see their correction, many tend to stop trading and investing and leave the markets altogether. This is because they learn the hard way that making money is not easy. In a way it’s a good thing because when you are young, you tend to have less money, and you are better off making mistakes and learning with less to lose.
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What’s your message for retail investors who continue to push the idea of getting rich via the F&O route?
I’ve said it earlier, “The stock market is the toughest place to make easy money.” Not all people are cut out for trading and they are better off investing in index funds and instead focussing on improving their careers.
Zerodha also has a related business that facilitates investments in mutual funds. How’s that been tracking? In particular with regards to new SIP set ups, and more importantly, cancellations?
The trends mirror that of the industry. We haven’t seen any dramatic slowdown in the flows or SIPs yet. What happens next on what the markets do. If the markets continue their downward journey, then we’ll see a slowdown for sure.
Now that you have shared what your customers are doing, could Nithin Kamath share with us how he thinks about money, and which asset classes he tends to favour?
Money gives me the freedom and the risk taking ability to support the new ideas we feel excited about in the long run.
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