How Investors Falling For Short Term Traps?
- SATHISH DIGITAL
- Aug 25
- 5 min read
Weekly Wealth Report
Issue 207, Weekly Wealth Newsletter: 25th Aug 2025 – 1st Sep 2025
(Weekly Wealth Newsletter and a Private Circulation from Creating Wealth Company)
Mr. Sathish Kumar
Curated by
Founder – Creating Wealth Company
Crorepathi Creator | Financial Consultant | Author | Speaker | Columnist | Youtuber
Phone – 9841058689 Mail – creatingwealthadvisory@gmail.com Web – www.sathishspeaks.com
How Investors Falling For Short Term Traps?
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Let’s look at why retail investors mistake trading for investing and pay a very high price!
In 1958, economist James Tobin posed a deceptively simple question that would later earn him the Nobel Prize: why do people hold cash when it earns no interest?
People hold cash not because they're irrational, but because they crave liquidity – the ability to convert holdings to spendable money quickly and without loss. This "liquidity preference" makes them willing to sacrifice higher returns for the comfort of immediate availability and apparent safety.
Indian retail investors face a remarkably similar puzzle today. Why do they treat equity markets like a casino when these same markets have been proven wealth creators over long periods?
First, they have the illusion of being able to "time" the market create a false sense that short-term trading is somehow safer than long-term investing. Also, they mistake the ability to buy and sell shares instantly for genuine safety and control.
Second, some long-term equity investors torture themselves by monitoring portfolio values daily, confusing normal market volatility with actual risk.
These two confusions lead to costly mistakes in their investments.
Tobin's solution was elegantly simple: understand what you're really buying. When you purchase equities, you're buying fractional ownership in businesses, not lottery tickets. Daily price fluctuations simply reflect other investors' varying opinions about value – they say nothing definitive about long-term wealth-creation potential.
Long-term investing helps you benefit from the power of compounding, multiplying wealth over time. It allows you to ride out short-term volatility and capture the overall growth of the economy. Equity investments over long horizons generally outperform fixed-income assets like FD or bonds. Holding for the long term also gives you tax efficiency with favourable LTCG tax treatment. Most importantly, it helps in building wealth steadily toward financial goals like retirement or children’s education.
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Weekly Market Pulse
Markets Snap Multi-Week Losing Streak, The Nifty 50 and BSE Sensex rallied nearly 1% this week, breaking a prolonged downtrend.
GST reform expectations and a stronghold on S&P's sovereign rating upgrade provided momentum, suggested to be catalysts for buying across auto and consumer sectors.
The auto sector logged its strongest weekly gain since May 2025, buoyed by expectations of a GST rate cut on two-wheelers, festive demand, inventory discounts, easing commodity prices, and better export prospects.
Reliance Industries and financial stocks notably contributed to this rally.
The week closed with a minor correction, erasing some of the gains— primarily due to weak performance in IT and financial stocks.
At the ET World Leaders Forum, Jefferies' Christopher Wood reaffirmed India’s status as the most compelling long-term equity story globally.
The top gainers were Cipla, Dr Reddy’s Labs, Bajaj Finserv, ICICI Bank and SBI Life Insurance, up 1.01-3.02%.
India HSBC Flash Manufacturing PMI rose to 59.8 in August 2025 compared to 59.1 in July 2025 while the Flash India Services PMI rose to 65.6 from 60.5 and the Flash India Composite PMI jumped to 65.2 from 61.1.
Mutual Fund Corner
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This Week Media Publications
This Week at Nanayam Vikatan.
“Why do you need a Good Financial Advisor and how to identify a Financial Advisor?”
Story of an Impatient Investor!
There’s a silent wealth-killer hiding in many investors’ minds snd 73% of them ignore it completely.
It’s called impatience and it ruins more wealth than bad investment ideas ever will.
The recipe says: Bake at 350°F for 60 minutes. Follow it patiently, and you get perfectly golden, crispy cookies. But crank the heat to 700°F and cut the time to 30 minutes because you want them “faster” and you’ll end up with a tray of black, burnt cookies.
Same recipe. Same ingredients. Different result.
Investing works the same way. The strategy might be right, the portfolio might be sound but rush it, tweak it constantly, and panic at every small dip… and you destroy the outcome.
My Book Publications
Middle Class to Million Dollar Book
To Buy my Untold Wealth Secret Book
Top 10 Mutual Funds to Invest in 2025
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Disclaimer
Mutual Funds and Stock Market Investments are subject to market risks, pls read all scheme-related documents carefully. The past performance of the mutual fund is not necessarily indicative of future performances. Mutual fund does not guarantee any returns or dividends.
This report is for informational purposes only and contains information, opinions, and material obtained from reliable sources every effort has been made to avoid errors and omissions and is not to be construed as advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, we shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means is prohibited.
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