Zerodha CEO Nithin Kamath’s subtle advice for investors amid ‘debilitating’ conditions: ‘Take a break from trading...’

Zerodha co-founder and chief executive officer (CEO) Nithin Kamath has shared some subtle advice for D-Street investors amid the heightened volatility in the Indian stock market due to global trade uncertainty. Kamath suggests that 'it won't be a bad idea' for investors to ‘take a break from trading and recharge’. 'Judging by what’s happening, you’re going to need it,' he said.

The discount brokerage's chief took to microblogging platform ‘X’ (formerly Twitter) to say that over the next 10 days, there will only be four trading days amid the designated Indian stock market holidays over the upcoming festivals. So, amid thin trading volumes and global recession concerns, investors should avoid trading in ‘potentially debilitating conditions’.

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According to the India Inc. leader, profitable trading requires investors to monitor the market and their own psychological moods. Kamath believes that when neither is conducive to trading, ‘It’s best to stand aside and wait for the situation to change.’ Kamath's remarks come amid the escalating global trade war triggered by US President Donald Trump's tariff hikes.

Nithin Kamath's advice for D-Street investors

Kamath suggests that by staying out of the markets, investors can survive to trade another day when they are in a peak performance mental state and the market conditions are optimal. According to most market experts, volatility will likely continue until trade war concerns subside with stable economic growth.

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The Zerodha CEO's post on ‘X’ read, "Good time to follow this advice. Over the next 10 days, there are only four trading days. It’s not a bad idea to take a break from trading and recharge. Judging by what’s happening, you’re going to need it. 

“Trading profitably requires that you monitor the market moods and your psychological moods. When either one is not conducive to trading, it’s best to stand aside and wait for the situation to change,” said Kamath in his post.

He added, “Don’t make the mistake of thinking you should trade even in these potentially debilitating conditions. By staying out of the markets, you can survive to trade another day, when you’re in a peak performance mental state and the market conditions are optimal.”

Kamath's latest advice for investors was quoted from a module titled ‘Innerworth—Mind over markets’ in Varsity by Zerodha. Varsity is an extensive and in-depth collection of stock market and financial lessons authored and created by Karthik Rangappa, Zerodha's chief of education.

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Rangappa heads investor education initiatives at Zerodha. Varsity is free, openly accessible and one of the largest online financial education resources. Varsity states that knowing when to stay out of the market is vital for survival. “There are times when you should stand aside and wait for the right moment. Not only can market conditions change, but also your psychological outlook."

What are the main reasons for staying out of the market?

Practical reasons: Even seasoned professionals must frequently step back and reevaluate their methods. "Don’t be afraid to acknowledge your limitations, take a rest, and enter the markets when you’re ready."

Psychological reasons: Some days, one feels tired, down, or just not feeling their best. "It’s at these times that you may not be able to maintain the positive, objective mindset you need for trading. You may act emotionally or impulsively because your psychological resources are depleted."

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Trading method: Seasoned professionals say that they are at their best when their old method starts to falter, and they have to devise a new one. They view the situation as a puzzle they must solve. They step away from the market and take a close look at the methods. They try to identify what went wrong with the method and look forward to tweaking it until it works again.

Kamath on Indian stock market

The Zerodha founder's latest suggestion comes a day after he shared a stark warning for the Indian stock market amid the current bloodbath: ‘If markets fall sharply, investors might stay out of the market for years—just like they did after the 2008 global financial crisis," said Kamath on Tuesday.

India's equity markets have been on a wild swing this week. On April 9, domestic equity benchmarks Sensex and Nifty 50 mirrored a global market rout triggered by Donald Trump's tariffs, as a widely expected rate cut and dovish shift by the Reserve Bank of India (RBI) did little to lift sentiment.

The NSE Nifty 50 dropped 0.61 per cent to 22,399.15, while the BSE Sensex declined 0.51 per cent to 73,847.15 on Wednesday after the NSE benchmark snapped its three-day decline to post its best session in three months on Tuesday. On Monday, the frontline indices logged their worst single-day decline in 10 months after the global equity markets went into a tailspin.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.