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Expert urges first time investors to avoid quick gain tips and casino like trading, favor SIPs, index funds, emergency funds, long term compounding, and annual portfolio reviews
With rising participation of young investors in the F&O segment, certain behavioural warning signs are becoming more visible.
Many first-time investors enter the stock market believing it is a shortcut to fast income instead of a tool for long-term wealth creation. Expert says beginners often focus on timing the market, following hot tips, or trading frequently, while actual wealth is generally created through patience, discipline, and compounding over time.
The key mindset shift investors need is to stop searching for stocks that can double in a few months and instead focus on habits that can compound wealth over decades. In the long run, discipline tends to deliver more consistent results than excitement-driven investing.
Hemant Sood, Founder and MD of Findoc Investmart Pvt Ltd, said wealth creation is “rarely dramatic” and is usually built through repetitive and patient investing.
Useful Shortcuts vs Harmful Advice
According to Sood, tools such as SIPs, index funds, and asset-allocation strategies can simplify investing without increasing risks for investors. However, he warned against advice promising quick gains or guaranteed targets in specific stocks.
He noted that harmful investing advice often depends on one market event or stock movement that cannot be predicted consistently, while useful investing principles generally work across market cycles and investor profiles.
Signs of Casino-Like Trading Behaviour
With rising participation of young investors in the F&O segment, certain behavioural warning signs are becoming more visible. These include constantly checking portfolios, increasing trade sizes after losses, using borrowed money for trades, and experiencing emotional highs and lows linked to market movements.
Sood said investors showing such patterns should temporarily move away from derivatives trading, return to SIP-based investing or cash equities, and reduce screen time to avoid impulsive decisions.
Small Steps for First-Time Investors
For individuals with modest salaries and no investing experience, building an emergency fund should come before investing in equities, according to Sood. He suggested starting with a small SIP, even as low as Rs 500 a month, in a low-cost Nifty 50 index fund.
He added that maintaining the investing habit is more important than the initial investment amount, and investors should gradually increase SIP contributions as income grows.
Technology Should Improve Judgment, Not Anxiety
While trading apps, algo trading, and real-time alerts have made markets more accessible, Sood cautioned that excessive alerts and constant monitoring can encourage impulsive behaviour among retail investors.
He recommended using technology mainly for research, education, portfolio tracking, and understanding long-term compounding instead of focusing on constant execution and stock-specific alerts.
Habits That Protect Wealth
Sood highlighted three key habits for long-term wealth protection — automating investments through SIPs, matching investments with financial goals and time horizons, and reviewing portfolios annually rather than daily.
He said frequent monitoring often leads to emotional reactions, while periodic reviews help investors maintain perspective and stay invested through market cycles.
On improving financial literacy in India, Sood called for personal finance education to begin at the school level, with greater emphasis on saving and investing before trading.
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