New investors should focus on long-term strategies, suggested market veteran Ramesh Damani during a panel in Mumbai on December 13.
While there are times when the market won't perform and you'll start losing money, Damani advises looking at this from a different perspective.
"But look at it the other way around. When I came in 1989, the Sensex was around 1,000. Today, it's 80,000. So it pays to be invested in good-quality businesses," he noted.
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Damani added, "I would tell younger people, those just starting in the market, if you want to trade, take 5-10% of your money and trade. But 90% of your money should be invested in high-quality businesses that you want to hold for a period of time. Because the true returns lie there," he advised.
He cited Warren Buffett as an example of the wealth-building potential of disciplined investing. "Warren Buffett has taught us that in a generation, you can go from middle class to millionaire if you manage your money wisely and make good profits. But through trading, it's very unlikely you'll get there. One or two people out of millions might succeed at trading, but most will make some money, lose some, and ultimately just get the excitement without the wealth."
Damani emphasized that, in the next 10-20 years, thanks to compounding, you can become a completely different person financially from where you started.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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