- NSE CEO Ashish Chauhan urged investors to avoid quick returns and speculative trading without knowledge
- He emphasized investing for the long term, ideally three to ten years, rather than daily trading
- Chauhan warned against basing decisions on rumors, TV talks, or using borrowed funds for investing
National Stock Exchange (NSE) Managing Director and CEO Ashish Kumar Chauhan insisted that investors should not be tempted to go after quick returns and take unsolicited stock recommendations and trade in derivatives without proper knowledge emphasizing on the importance of being disciplined in investing.
Speaking in a conversation with Nehima Vachhrajani of NDTV Profit, Chauhan said that be it long-term investment or speculation, it is crucial for investors to invest in the market for three to five years or for at least a decade, and not to attempt to make instant profits by buying and selling stocks within one day.
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"Investment means being patient and investing for the long run and not buying in the morning and selling in the afternoon." He also reminded investors not to base their judgment on talks on TV or market rumors and news.
Chauhan said that understanding and the relevant knowledge is necessary for any involvement of an investment in FandO trading, as engagement in this trading can expose one to big losses.
"You shouldn't invest in derivatives unless you know how to do so," he concluded.
Chauhan urged that investors should act prudently and protect their money instead of letting their excitement in the market dictate their investing behavior. Also, he warned about using borrowed funds and investing more money than someone can afford.
For people who have no time or knowledge to follow the market activity, companies, and the economy, Chauhan advised investing in mutual funds or turning for help to professional fund managers, advisors, and portfolio managers.
He compared investing to the healthcare sector stating that most people tend to consult doctors than treat themselves without any expertise.
Chauhan pointed out that when it comes to the problems that may face investors in a year, there will be fluctuations in the market. He stressed the importance of not being influenced by speculative tendencies and excessive risks.
As he explained, the goal is to be invested for the long haul to achieve superior returns than all the other investment methods, while being aware of the risks that the market poses.
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The discussion also revolved around AI and its possible implications for the Indian markets, especially the rise of India as a ground for investment in the age of AI.
Referring to the tech boom of the 1990s, Chauhan stated that there are similarities between the current scenario and the earlier internet investment scenarios. He warned investors against assuming that this time only a few companies will take all the benefits from the AI.
In his comparison with the dot-com boom of 1998-2000, he mentioned that even though this technology would provide amazing opportunities in the years to come, the initial euphoria could lead to inflated expectations and price drops.
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