Zerodha CEO Nithin Kamath's talks about the psychology of the market and investors…'

On the 9th of April, when the global market was trying to hit the bottom of recent year due to Donald trump triff policy, which has been paused for 90days, Kamath take on his Twitter account suggesting to understand the psychology of market, and not to unnecessarily take pressure, but rather take a break.

He started his tweet with “Good time to follow this advice. Over the next 10 days, there are only 4 trading days. It’s not a bad idea to take a break from trading and recharge.” He referred to the market sentiment and implied, “Judging by what’s happening, you’re going to need it. 😬”

Good time to follow this advice. Over the next 10 days, there are only 4 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… pic.twitter.com/5nKdi8qWwX

— Nithin Kamath (@Nithin0dha) April 9, 2025

He said, as an investor, to be a profitable investor, you need to understand the psychological moods of the market. If the mood is not suitable, it’s best to stand at the shore and watch the tempest on the sea.

 

I agree with his statement, with a lot of experience myself. Just like many others, I did try to surf on the waves of the market and was swept away by the strong current.

He said, “...when you’re in a peak performance mental state and the market conditions are optimal."

He added, retail investors from the last five years were the major buyers of equities. See the data given by NSE.

Source: NSE

Source: NSE

Kamat said the last financial year added 14.3m new investors combined NDSL and CDSL.

The question is, how much we lost in the last six months?

As the data is still continue, the calculation so far estimated ₹14 lakh crore wiped off from the Indian stock market since Trump tariffs imposition. The global market didn't stay behind.

Business Standard said, “Such a synchronous sell-off in risk assets occurred only in the global financial crisis in 2008 and the Covid pandemic of 2020.”

The continued sell-off in the Indian equity market has wiped out a staggering 94 lakh crore of investor wealth in the past five months, with the market plum of around 17% from their all-time high in September 24.

Look at the picture

Kamth's Fear

Although the retail investors were the ones who have been consistently buying equities besides the odd, he shared his doubts will this be continue? Will the buyers still continue to buy the dip?

He also stated, if the fall continues, it is possible for investors to stay out of the market for years, just like in the year 2008 market crash.

So, we need to focus on psychology with the market so that you won’t stuck for years, unlike many.

What Is Investor Psychology?

 

The study of the emotional and cognitive factors that drive the decision of an investor called Investor Psychology.

We make decisions based on two main factors, mental and emotional, so the investors does. Occasionally, his buying, holding or selling decisions are driven by mental and emotional factors.

Take an example: Mohit buys equity at the rate of 70, and it falls. He thought he should buy more because it’s cheaper now, and when it will go up, he would catch a big fish, a big profit. But the market doesn’t work only on this thought, its has many other factors to settle the price of a share, and nobody knows how much time will it take to make his decision a profitable one. So, he got trapped for years. The emotion of becoming profitable made him to ignore other factors.

The market said, its not always good to put your hard earn money blind fold, sometimes you need to wait and watch to low the tides, only then should you put your boat into the water.