Remaining patient best strategy for investors amid uncertainties: Sebi Chief

Sebi chairman Tuhin Kanta Pandey on Saturday urged investors, especially retail ones, to remain patient, terming it the “best strategy” in uncertain times.

In remarks made amid the Middle East conflict-induced selling pressures in the markets, Pandey said past episodes of turbulence in markets, like the onset of the Covid-19 pandemic or the Russia-Ukraine conflict, have shown that things stabilise eventually.

The Sebi chief said global efforts are underway to restore stability, even as the ongoing tensions in parts of the world have created uncertainty in energy markets.

“For many investors — especially retail investors — the best strategy during such a period of uncertainty is to remain patient,” Pandey said, speaking at an event organised by Moneycontrol.

The chief of the Indian capital markets regulator acknowledged that “uncertainty” dominates the global economic landscape, and added that the same is triggered by technology changes with the adoption of artificial intelligence and geopolitical tensions.

Citing past experience, Pandey said, “Markets experienced turbulence ... but they eventually stabilised.”

He went on to say that uncertainty is not an exception but a recurring feature in financial markets, and added that the real test of a system is to check if it continues to function smoothly, fairly and efficiently in the face of challenges.

“In uncertain times, the strength of a capital market does not lie in the absence of volatility.

Volatility is a natural feature of markets. The real strength lies in the confidence that the system will function fairly, transparently and efficiently even during periods of stress,” he said.

India’s capital markets can navigate the uncertainty and also emerge stronger if we continue to strengthen our institutions, deepen participation and uphold governance, he said.

Efficient capital markets play a stabilising role in an uncertain world by sustaining investor confidence, enabling transparent price discovery and absorbing shocks, he said.

“Efficiency is the foundation of trust in the financial system. Without that trust, capital hesitates. Investment slows. And growth becomes more difficult to sustain,” he said.

The Indian capital markets have deepened and become more resilient over the last decade, Pandey said.

In an era when markets are reacting instantly to narratives, the key question policymakers and market participants are grappling with is how to ensure speed doesn’t compromise stability, Pandey said.

Underlining that regulations alone cannot deliver efficient markets, Pandey said it is a shared responsibility which requires the collective commitment of the entire ecosystem.