Retail investors often discover how much risk they have taken only after a trade goes wrong. What can they learn from institutional investors about managing money before that happens? In this episode of The Core Report Special Edition, financial journalist Govindraj Ethiraj speaks with Sandeep Nayak, Managing Director and CEO of Centrum Finverse, about why retail investors lose money, how emotions influence investment decisions and what a disciplined approach to wealth creation involves.
Sandeep Nayak examines the gap between entering the stock market to build long-term wealth and getting drawn into trading for quick profits. He explains why understanding potential losses, assessing the risk-reward ratio and controlling position sizes should come before placing a trade. The conversation also explores options trading, the use of data and analytics, and why access to trading tools needs to be accompanied by investor education.
Institutional investors typically follow an asset allocation strategy and a defined investment process. Sandeep Nayak explains what individuals can learn from that discipline, particularly when market corrections trigger fear or rising prices encourage investors to chase returns. He discusses time in the market versus timing the market, the power of compounding and the difficulty of staying patient when returns disappoint.
The discussion moves beyond stock selection to portfolio diversification across equities, mutual funds, fixed income and gold. Sandeep Nayak outlines why investment choices need to reflect financial goals and time horizons. Govindraj Ethiraj also questions the relationship between brokerage revenues from active trading and the industry’s responsibility towards customers building long-term portfolios.
The conversation explores global investing for Indian investors, including overseas ETFs, US stocks and opportunities in artificial intelligence, semiconductors and data centres. Sandeep Nayak explains why geographic diversification should extend beyond a fashionable theme, and why valuations, ETF premiums to net asset value and tax considerations matter when investing overseas.
