Nithin Kamath’s Warning Amid Market Volatility
Zerodha CEO Nithin Kamath has issued a cautionary note to Indian investors, expressing concern over the possibility of a long-term retreat from the equity markets if a sharp correction occurs. Reflecting on current market turbulence, Kamath warned that a significant fall could prompt retail investors to exit the markets for several years, much like the trend observed after the 2008 global financial crisis.
In a recent post on social media platform X (formerly Twitter), Kamath highlighted how India’s equity mutual fund net inflows dropped considerably between 2008 and 2014 following the global downturn. He drew parallels between that period and the current situation, noting that investor sentiment remains uncertain amid escalating fears over global trade conflicts and recession risks.
Despite the present volatility, Kamath credited retail investors for fueling the Indian stock market rally from 2020 to 2024. “Retail investors have consistently been net buyers of equities over the past five years, buying into dips even in the face of external risks and global headwinds,” he wrote. However, he added a note of caution: “Whether they’ll continue to buy the dip is anybody’s guess.”
Market Swings Raise Investor Concerns
Nithin Kamath’s warning coincides with one of the most turbulent periods in the Indian stock market in recent months. On Monday, both the BSE Sensex and the Nifty 50 index experienced sharp declines, marking their worst single-day losses in nearly a year. The Sensex fell by over 2,200 points (2.95%), while the Nifty 50 plummeted 742 points (3.24%), as global markets reacted negatively to escalating U.S. trade tariffs and looming recession fears.
However, the markets saw a quick rebound the next day. On Tuesday, the Nifty 50 gained 1.69%, while the Sensex rose by 1.49%, snapping a three-day losing streak. This recovery added ₹7.32 lakh crore to investors’ wealth. Still, analysts on Dalal Street remained cautious, warning that the bounce may not signal a lasting uptrend. With trade-related developments continuing to drive uncertainty, experts advised a hedged approach, favoring resilient stocks that show stronger relative performance.
Kamath’s observations reflect a deeper anxiety within India’s investor community—whether the resilience seen in recent years can endure another major downturn.
Gold vs. Equities – A Surprising Comparison
In a separate insight, Kamath pointed to another asset that has quietly outperformed equities over the long term: gold. “It’s kinda crazy that since 2000, gold has delivered better returns than the Nifty 50,” he remarked, backing his statement with 25 years of data. According to his analysis, gold prices have surged nearly 2000% since 2000, compared to a 1,470% increase in the NSE Nifty 50 index.
In 2025 alone, gold delivered an impressive 18% return, while the Nifty LargeMid 250 index posted a 6% decline. Kamath’s post reignited discussions about portfolio diversification and the long-term role of traditional assets like gold, especially in times of heightened market uncertainty.
As global and domestic headwinds continue to stir volatility in Indian markets, Nithin Kamath’s warning message is clear: investors must brace for unpredictability—and remember the lessons of the past.
