'India is in a very good position; retail investors should stay invested for a long time', said SEBI Chairman

Even with worldwide challenges, India stands in a highly favorable position and retail investors ought to invest in it indefinitely even in a volatile market, said Market regulator SEBI Chairman Tuhin Kant Pandey on Tuesday.

India has been resilient, Pandey told PTI in an exclusive interview, after tariff war hit markets everywhere across the globe. The country's economic prowess was pointed out by the market regulator, who said, "I would say that. India is in a very good position despite global adversities." The reasons are stable economic growth, low fiscal deficit, manageable external debt, no twin balance sheet problem and manageable current account deficit, Pandey said. The nation is also engaged in negotiating a series of bilaterals, he added.

"There is no doubt that the geo-economic fragmentation as well as the announcements made by the US in particular created adverse conditions globally," he said. On the impact of the ongoing volatility on retail investors, Pandey admitted that many investors have joined the market recently and have not seen any slowdown.

Pandey said this would prove to be a "learning opportunity" for retail investors. He advised investors to stay invested for the long term. "If they (investors) adopt this strategy, they will definitely be in a better position rather than panicking in the short term," said bureaucrat-turned-regulator Tuhin Kant Pandey, who took over as SEBI chairman in March this year.

There is also a need for retail investors to have better awareness and place bets with proper information, he said. Citing the example of futures and options trading, where retail investors gambled and lost money in more than 90 per cent of trades, the Sebi chairman said one should not behave like being in a casino. Sebi's measures on this front have been effective to some extent, Pandey said. There has been a decline in volumes year after year. The activity is still higher than two years ago, he said.

When asked about the slowdown in systematic investment plan (SIP) flows and disappointment among retail investors, the Sebi chairman said, "We should understand that investors are taking their own decisions and diversifying their asset allocation."

He said retail investors need to be intelligent and well-educated. They should not be lured by false promises of high returns and should never be influenced by unregistered entities acting as "financial advisors".