According to him, it is essential for investors to avoid excessive losses during tough times and not be overly fixated on maximizing gains during good times.
Nikhil Kamath believes that investors should refrain from getting caught in the frenzy of fast-paced markets if they plan to stay invested for the long term with lower volatility.
He shared his thoughts on Twitter, emphasizing the importance of minimizing losses during downturns and not trying to extract maximum gains during bullish periods.
Everything is cyclical, if there's one thing that doing this every day for 19 years has taught… pic.twitter.com/dBtkR8ncM6
— Nikhil Kamath (@nikhilkamathcio) August 2, 2023
He tweeted, ‘Bear markets tend to be quite theatrical, and if this bullish trend persists with low volatility for an extended period, don’t fall for the hype.’
Nikhil Kamath further adds, ‘Everything is cyclical, and if there’s one thing I’ve learned from the last 19 years, it’s to avoid significant losses during bearish times and not chase extreme profits during bullish times.
Nikhil Kamath shared an investment chart, illustrating the historical performance of the Nifty index. The chart shows that the bullish market, which began in 2020, has continued for approximately 160% growth in a span of three years and three months.
In 2005-06, the Nifty surged by 170% in two years, followed by a 30% decline within a month in 2006.
‘The average bull market usually lasts for about a year and ten months. However, the recent four bull markets have exceeded this average, lasting more than three years on average. On the other hand, bear markets are relatively shorter, often concluding within half a year,’ explained the investment chart shared by Nikhil Kamath.
‘In a bull market, the average return is 101%, while bear markets see an average decline of 33%. The shortest bull market lasted only 50 days, while the longest lasted for 1,419 days.’
Both the benchmark indices, Sensex and Nifty, reached their new record highs in July. On July 20, 2023, during trading hours, Sensex touched a new peak at 67,619.17, while Nifty registered its all-time high at 19,991.85.
Please note that the opinions and recommendations mentioned above are those of individual analysts and brokerage firms, not Mint’s. We advise investors to consult certified experts before making any investment decisions.”