Although I was working for a bank from 2006 I started my career as a wealth manager in 2009. I remember my early days as Wealth manager UPA came to power and Nifty hit upper circuit.
During my stint at the bank wealth mgmt from 2009 to 2014 most of the clients were very scared to invest in equities and the trauma of 2008 was quite evident in how clients reacted to slightest negative news. I remember we hardly got clients to invest in Equity MF(ULIPs yes). Most of the MF sales that happened during my tenure with the bank was either debt funds/FMPs or Cappros. Capital protection was the basic threshold for suggesting any product to any client.
When BJP came to power in 2014 the Sensex broke out of that jinxed 21000 levels. Most investors thought its another false rally and sold into it. It was only in 2015 that investors started to realise that things have changed for good and started building their mutual fund portfolios again. But the nerves were still frayed as markets remained volatile. I remember the kind of panic every small news flow used to cause. All ‘experts’ wanted to be the next Michael Burry. Macro gurus were in vougue. Then I saw euphoria of 2017, followed by grueling phase of 2018 to 2020. 2020 market correction followed by sharp recovery changed a lot of things for the investors. It also brought in a breed of new young investors with higher risk appetite. Last 4 yrs have been far less volatile than history. They have also been very broadbased as one sector topped out another took over the baton of leadership.
All this has made investors extremely complacent and risk aversion has disappeared and risk tolerance is at all time high to my knowledge. Investors are lapping up stories about stocks, sectors and the country with blind faith. Those who were scared for every small event triggering market correction are now willing to book any profits even when you tell market is approaching bubble territory. Not just investor many people from investment mgmt industry think the same about markets. Wealth mgmt industry itself is in euphoric phase as National players are on buying many small MFD businesses, many wealth mgmt companies are doing capex in and new players are entering the fray. Private banking outfits are picking up talent with massive hikes.

We are probably in the same phase that Robinhood traders were in 2020-how many of you remember the popular Robinhood trader quote “Have fun staying poor”! The FOMO in Indian Equity markets is at its peak. The last time I saw something like this was Robinhood traders in the USA and residential real estate in 2013. We have seen in 1999 & 2007 that no one can call the precise top but when market sentiments are so euphoric its best to step away and not give into FOMO. Warren Buffett has taught us “The less prudent with which others conduct their affairs, the greater prudence with which we should conduct our own affairs”.