‘Stay in the market’: Zerodha’s Nithin Kamath advises investors planning to buy declines in the event of volatility
The market has fallen by more than 15% since its peak
The decline in the Indian stock market fell by 15% from a 52-week high that reached last September. Many retail investors have seen previous gains in recent months. Kamath refers to the current environment, which he said could be a good time to pause.
“A good time to follow this advice. There are only 4 trading days in the next 10 days. It’s not a bad idea to take a break, and take a break from trading and charging,” Kamath said on social media, adding: “From what happened, you’re going to need it.”
Trade Psychology Matters
Kamas also shared insights into trading psychology from the company’s investor education platform Zerodha Varsity. He quoted a passage from Innerworth, highlighting the importance of spiritual preparation in trading.
The article says: “Trading profit requires you to monitor market sentiment and psychological sentiment. When any of them is not conducive to trading, it is best to stop and wait for the situation to change.”
It further added: “Don’t mistakenly think that you should trade even under these potentially debilitating conditions. By staying away from the market, you can survive a day when you are in a peak performance mental state and the market is in the best position.”
Retail investors continue to buy despite global risks
On Tuesday, Kamas pointed out patterns of retail investors’ behavior. Share data from the past five years, he said: “One of the crazy things that have been going on over the past five years is that retail investors have been net buyers of stocks. Whether they will continue to buy dipping sauce is anyone’s guess.”
He released a chart showing how retail investors have been stable buyers since January 2020. The highest retail purchase occurred on the day of the last election results when investors bought stocks worth more than Rs 80,000 crore.
Kamas also pointed out that retail investors played a crucial role in the Indian market rally between 2020 and 2024. Despite external risks and global headwinds, investors continued to “buy downturns” throughout the period.
Warn of possible long-term market exits
Kamath issued a warning about what could happen if market conditions worsen. “By the way, if the market drops sharply, investors may be as far away from the market as they have since 2008,” he said in a recent article. He mentioned the period after the global financial crisis, when equity-oriented mutual fund plans that net inflows into India remained succumbed between 2008 and 2014.
Zerodha CEO’s statement was due to growing investor uncertainty, partly due to tariff announcements by U.S. President Donald Trump and global economic issues.
