Managing investments in 2026 amid volatile markets and geopolitical uncertainty

Crypto SIPs grew by 60%, while gold and silver assets under management surged from ₹57,000 crore to ₹2 trillion by the end of the year. Retail participation in IPOs hit a record high, with subscriptions totalling nearly ₹42,000 crore—three times the amount invested in 2023 and almost on par with the ₹45,700 crore deployed by foreign portfolio investors in new equity issuances this year.

The pressing question now is whether these investments will actually deliver returns over the long term.

Investor behaviour, however, has not changed much over the years. FOMO and the pursuit of quick returns—fuelled by greed and amplified by social media—continue to shape investment decisions. 2025 also delivered a sharp reality check, with markets initially correcting by 12–25%. While broader indices eventually recovered, investors in the most fancied mid- and small-cap stocks were left nursing losses, along with hard lessons on sector and style rotation.

Pause and assess

Against a backdrop of persistent negative news—geopolitical tensions, tariff concerns and sustained foreign investor selling—it is important for investors to pause and reassess their portfolios.

What role do these investments play? Are they aligned with financial goals, or can they be meaningfully linked to one? Which holdings form the core portfolio meant for long-term goals, and which are tactical allocations? An investor may have bought silver riding recent performance, but the key question remains whether silver is a long-term asset aligned to a goal or a tactical bet that needs close monitoring.

FOMO often pushes investors towards unregulated investments such as cryptocurrencies, digital gold or unlisted shares. The biggest risk here is the absence of accountability and investor protection. Without regulatory oversight, there are no enforceable standards for disclosures or governance, and in the event of disputes or losses, legal recourse is virtually non-existent. What appear to be high-return opportunities can quickly become capital-eroding traps, where risk remains opaque and trust is the only safeguard.

Corporate bonds—particularly lower-rated ones—were another favoured instrument in 2025, promising double-digit returns. While these bonds may appear safe, they carry risks that investors often underestimate. Default risk and lack of liquidity are the biggest concerns. Many investors tend to treat fixed-income instruments as substitutes for fixed deposits, failing to recognise how difficult fund recovery can be, even when collateral is involved.

Investing without understanding statutory requirements can also prove costly. For years, Indians were unable to invest directly in foreign stocks, and the novelty and narrative around global investing have only increased their appeal. What often gets overlooked is tax reporting. Foreign asset holdings must be mandatorily declared in ITR-2, and a large number of tax notices have already been issued for non-disclosure. Penalties for omission or incorrect disclosure of foreign stocks can far exceed the returns earned from these investments.

Setting up for 2026

In the rush for higher returns, overlooking the above factors can not only erode capital but lead to outflows far exceeding the original investment! In 2026, it is time to shift attention to five portfolio priorities:

• Build a core portfolio based on goal planning which can be held for the long term and across market cycles. Keep tactical investments limited to 10% of the overall portfolio
• Invest only in products which beat inflation on post expense, post-tax basis. Remember products with high returns also come with high risk.
• Keep away from unregulated investments and anything which sounds complex and not easy to understand.
• Chasing trends is exciting but staying invested is profitable. Being patient isn’t always comfortable but has proved to be rewarding.

• Maintain a structured record of all financial documents. The NSDL CAS makes it easy to keep track of all holdings on a regular basis. Further, DigiLocker users can now fetch and store their statement of holdings for shares and mutual fund units from their demat accounts, along with their consolidated account statements. Ensure all declarations are done correctly in the income tax returns.

The road to returns is simple, steady and boring. That is the key mantra for 2026.

Happy investing!

Mrin Agarwal is a financial educator, founder of Finsafe India and co-founder at Womantra.