Have ₹10 lakh to invest? What can you buy to earn highest return before next Diwali?

The Diwali season is over now, and the Christmas is not far either. It will then be followed by the onset of New Year i.e., 2026. While stock markets have been quite volatile lately, gold prices, meanwhile, rose significantly in the past few weeks until Diwali, before changing direction as they lost 2% on Friday.

What would you do if you received a windfall of ₹10 lakh during Diwali and intend to invest in the growth-yielding asset classes? We spoke to a few experts, and they recommend locking in equity for a long tenor instead of seeking immediate returns.

One should, they recommend, avoid a short-term outlook on equity investments. Having just a one-year view on equity investments is not advisable. Instead, have a long-term view for these investments, says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services.

Diversification is the key

At the risk of sounding cliche, experts argue that concentrating heavily in one asset class or category is not recommended. Therefore, retail investors should refrain from investing entire ₹10 lakh corpus in one stock, fund or asset class. “Concentrating too heavily on a single bet can lead to significant opportunity loss and portfolio instability if the call goes wrong. Hence, we strongly argue that asset allocation is the true mantra for sustainable wealth creation,” says Sachin Jain, Managing Partner, Scripbox.

Preeti Zende, founder of Apna Dhan Financial Services, echoes similar sentiments. “Over the past 18 months, retail investors have faced substantial volatility in the stock market, yielding minimal returns, while commodities like gold and silver have soared. Looking forward, diversification across different asset classes is key to making profitable investments,” she explains.

Rely on large caps

They also argue that a major chunk of your corpus ( ₹10 lakh in this case) should go towards blue chip stocks, whereas you could make a smaller allocation to mid and small cap mutual funds.

“For retail investors, the opportunity lies not just in established blue chip stocks but in identifying well-managed mid cap innovators within these high growth themes before they become market darlings. Instead of chasing last year's winners, consider adopting a barbell strategy. This involves anchoring your portfolio with steady large cap stocks in sectors like banking while allocating a smaller portion to high growth mid-caps in infrastructure and renewables to capture significant potential upside,” says Om Ghawalkar, Market Analyst, PhonePe Wealth (Share.Market).

(Assuming you have ₹10 lakh to invest; Source: Sachin Jain, Scripbox)

How to divide ₹10 lakh across asset classes

Experts recommend that ₹10 lakh corpus should be divided among different asset classes with maximum (around 50%) in flexi caps, a smaller portion (30%) in mid-caps and the remaining (20%) in arbitrage funds or money market funds.

“With 10 lakhs to invest, consider allocating 50% to diversified equity mutual funds equity mutual funds like flexi-cap and multi-cap and some part in midcap for long-term goals like retirement and education. Allocate 30 percent for mid-term goals in aggressive hybrid funds, debt funds, and gold or silver ETFs. Finally, set aside 20% in arbitrage funds, money market funds, or ultra-short-term funds, and consider bank fixed deposits for liquidity and emergency needs,” says Preeti Zende, founder of Apna Dhan Financial Services.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.