Two Costly Mistakes New Investors Make in a Market Crash : Nithin Kamath

Nithin Kamath, CEO of Zerodha, highlights two common mistakes new investors often make during their first significant market downturn:

1. Chasing Quick Profits:

Many investors are tempted by the allure of rapid gains. However, Kamath warns that attempting to make quick money in the stock market is often a sure path to losses. He emphasizes the importance of patience and a long-term investment strategy over seeking immediate returns.

2. Lacking Proper Guidance:

Kamath points out that the Indian equity market suffers from a shortage of qualified investment advisors. Despite a significant increase in individual investors—from 30 million in 2020 to 100 million today—the number of Registered Investment Advisors (RIAs) has remained stagnant, with fewer than 900 active advisors. This disparity leaves many investors without essential guidance, increasing the risk of poor investment decisions.

To navigate market volatility effectively, Kamath advises investors to focus on long-term goals and seek out credible sources of information. Avoiding the pitfalls of chasing quick profits and ensuring access to sound financial advice are crucial steps toward building a resilient investment portfolio.