Don't chase instant profits, adopt long-term investment approach: NSE chief

Mumbai, Nov 8 (IANS) National Stock Exchange (NSE) Managing Director and CEO Ashish Kumar Chauhan has cautioned investors against chasing quick returns, acting on unsolicited stock recommendations and trading in futures and options (F&O) without adequate knowledge, stressing the need for discipline and a long-term approach to investing. 

In a conversation with NDTV Profit, Chauhan said investors should focus on staying invested for three to five years or even a decade rather than attempting to make instant profits through frequent buying and selling of stocks.

"Investment means being patient and investing for the long run and not buying in the morning and selling in the afternoon," he said, warning investors against making decisions based on television discussions, market rumours or speculative news.

Emphasising the risks associated with derivatives trading, Chauhan said investors should enter the F&O segment only if they understand how it works and have the necessary knowledge to manage the associated risks. He cautioned that uninformed participation in derivatives could expose investors to substantial losses.

He also advised investors to exercise caution while deploying their money in the stock market, warning against borrowing funds for investments or taking risks beyond their financial capacity.

For investors who lack the time or expertise to track market movements, companies and economic developments, Chauhan recommended mutual funds and professional investment services, including fund managers, financial advisers and portfolio managers.

Drawing a comparison with healthcare, he said people generally consult doctors rather than attempting to treat themselves without the required expertise. Similarly, investors should seek professional guidance instead of making uninformed investment decisions.

Chauhan also cautioned that market fluctuations are inevitable and investors should not allow short-term volatility or speculative impulses to influence their investment strategies. He said a long-term investment approach could help investors achieve better returns than several alternative investment avenues, provided they remain mindful of market risks.

The discussion also covered the growing role of artificial intelligence (AI) and its potential implications for Indian markets, particularly India's emergence as an investment destination amid the technology-led transformation.

Drawing parallels with the internet boom of the late 1990s, Chauhan said the current AI-driven investment cycle shares similarities with the dot-com boom of 1998-2000.

--IANS

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