Dhirendra Kumar, CEO & Founder of Value Research, feels that investors need not avoid temptations like crypto or new mutual funds. At the 40 After 40 Retirement Expo in Mumbai, he told people to try but with discipline, diversification, and a long-term approach.
He pointed out that trends such as thematic mutual funds or risky investments may look appealing, but as long as the investors remain constant and diversified, even a mediocre fund manager cannot affect their portfolio. He emphasized that risk-taking with sound calculations can turn out to be profitable in the long term.
Kumar warned against being too optimistic about the market, adding that investors who pursued short-term gains in the past ended up making wrong decisions. He mentioned past instances, including 1992 and 2001, where investor excitement led to poor decisions and eventual regret.
He stressed the need to learn from mistakes. In his view, investors should incur small losses in the beginning but not avoid taking risks at all and suffering huge losses later. He believed that experience is the best teacher when it comes to investing.
He also emphasized diversification and asset allocation. While diversification is key to risk management, he said that asset allocation is not important in the first five years, as establishing a solid investment foundation is more important at the onset.
Kumar further emphasized that although knowledge of how the market operates is useful, it is not a requirement. He mentioned that some people get attracted to the market, treat investing like a game, and then quit when they lose. Instead, he stressed the importance of having the right mindset and staying committed to long-term investing.
Watch the full video for more information.
