Market veteran Ramesh Damani believes that compounding is the “eighth wonder of the world” and advises Young India to understand how compounding works in the stock market.

In an interaction during the CNBC-TV18’s Global Leadership Summit, Damani shared his learnings from the stock market from the last three decades.

The first advise Damani has for the new investors in the stock market is to remain broadly invested and that the market cannot be timed.

“You can’t time the market, it’ll go up and down and you’ll be happy and then you will suddenly miss the great rally. A lot of the gains come in a very scattered amount of time so broadly remain invested in high quality businesses, if you will,” Damani said.

The second lesson is about compounding and for investors to understand how the “magic of compounding works.”

“I think compounding can take, in one generation, from poverty to wealth, if done properly. So I think the enduring lesson that I want to give to a younger audience or to a young India is understand how compounding work. It’s actually the eighth wonder of the world,” he said.

The Nifty has corrected over 10% from its all-time high of 26,277 that it had hit in September this year. While Damani said that there might be a time correction in the market, he said he is fine with that because the markets have had a very strong run from the Covid-19 pandemic lows, with the Nifty having tripled in value from the March 2020 lows.