Industry professionals Mihir Vora, CIO of Trust Mutual Fund (speaking to ETNow), and Trivesh D., COO of Tradejini (in an interview with ETMarkets), highlight that the key to a successful start is making informed and strategic decisions.
For first-time investors, the path to success is built on a foundation of patience, strategic decision-making, and a well-diversified portfolio.
Starting with a flexi-cap fund allows beginners to dip their toes into the market without taking on too much risk.
As you gain experience and become more comfortable with market dynamics, you can explore higher-risk assets for potentially higher returns.
In 2025, market volatility will present both challenges and opportunities. By staying focused on capital protection, making well-researched investments, and gradually entering the market, first-time investors can build a portfolio that supports long-term growth. So, take it slow, stay informed, and build your financial future one step at a time.
Here’s what you need to know before you begin your investment journey:
1. Start with a Flexi-Cap Fund for Core Holdings
Mihir Vora strongly recommends that first-time investors focus on a flexi-cap fund as a core holding in their portfolio. “A core holding should always be a flexi-cap fund. If you are starting for the first time, I do not think you could start with a midcap or a smallcap fund,” he says.
Flexi-cap funds are designed to give fund managers the flexibility to allocate investments across various market capitalizations—large, mid, and small-cap stocks. This takes the decision-making burden off the investor, making them an ideal choice for newcomers.
Vora adds that as you grow more sophisticated in your understanding of the market, you can consider exploring mid and small-cap funds, which typically offer higher risk and reward.
2. Patience Is Key for First-Time Investors
Entering the stock market as a first-time investor requires patience. Vora emphasizes that your investment horizon plays a significant role in the types of funds you should choose. A long-term approach is critical, as the markets can be volatile, especially in the early years of an investor’s journey.
For those just starting, the focus should be on building a stable foundation with a diversified portfolio that balances risk and return. As your experience grows, you will be in a better position to take on more volatility and diversify into higher-risk assets such as mid and small-cap funds.
3. 2025: A Year for Long-Term Investors to Stay Vigilant
According to Trivesh D., COO of Tradejini, while 2025 could be a promising year for long-term investors, it’s likely to be a volatile one. “This year is likely to be volatile, which could create several entry points,” he notes. For first-time investors, this underscores the importance of staying calm and focusing on the bigger picture rather than getting swayed by short-term market fluctuations.
The key challenge for investors will be timing their entry. “If volatility continues, long-term investors might find opportunities to enter at attractive levels,” Trivesh adds. However, it’s essential for beginners to remember that volatility brings both risks and opportunities, and being strategic about when to buy is crucial.
4. Capital Protection is Crucial in a Volatile Market
As the market experiences volatility, the need for capital protection increases. Trivesh advises first-time investors to take a balanced approach. “In 2025, investors should focus more on protecting their capital, especially given the market volatility,” he explains. While safeguarding your portfolio, it’s also important to look for well-researched opportunities.
First-time investors should prioritize protecting their initial capital during market corrections and focus on quality investments with solid growth prospects. By gradually building positions, investors can take advantage of dips without overexposing themselves to risk.
5. Focus on Multi-Bagger Opportunities with Caution
While the goal for many investors is to find multi-baggers—stocks or funds that have the potential to increase several times in value—it’s vital to approach this with caution. “There will always be opportunities to chase multi-baggers when the valuations are right,” says Trivesh.
First-time investors should avoid chasing hot stocks without fully understanding the risks involved. Instead, it’s better to make selective, well-researched bets on stocks with strong growth potential. By starting small and gradually building up these positions, investors can learn the ropes while protecting their capital.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
