Not F&O, Mark Mobius Advises This Instrument For Young Investors

Renowned investor Mark Mobius in an exclusive interview with Republic Business issued a strong caution to young people regarding the risks of trading in the derivatives market, urging them to focus on long-term investments in solid companies rather than engaging in speculative trading, 

Mobius warned that the derivatives market can be a highly volatile and dangerous space for inexperienced investors, particularly younger individuals. "Young people should be very careful about the derivatives market," he advised. 

He emphasised the importance of concentrating on identifying quality companies and investing in their stocks as a more sustainable strategy. For those who lack the time or expertise to conduct in-depth research, Mobius recommended alternative options like exchange-traded funds (ETFs) or professionally managed investment funds.

He further highlighted the risk of gambling in the stock market, particularly among young investors eager to make quick profits through derivative trading. According to Mobius, this trend of speculative trading can lead to significant financial losses and undermine the long-term stability of investors’ portfolios.

Mobius’ comments come at a time when the derivatives market has gained popularity in India, with many retail investors seeking to capitalize on short-term price movements and leverage. However, the investor cautioned that such practices could be detrimental, especially for those without a deep understanding of the market’s complexities.

In his interview, Mobius highlighted  that a more prudent approach—focused on buying shares of well-researched companies or investing in diversified funds—can offer more reliable returns over time. "ETFs are a good method for young investors," he noted, pointing to their low cost and diversification benefits.