Mint Money Compass: Don’t let dark patterns, market swings, or emotions cost you money

Many years ago, when I started the annual ratings of health insurance products in Mint based on features, claims experience and price, the idea was to make this exercise more than just a print feature. We wanted to build a digital property that readers could actively use online. That meant putting serious thought into design, how to make search intuitive, how to present rankings clearly and how to nudge readers to look beyond the rankings to understand the underlying metrics that truly matter.

The idea was simple: customers should go beyond price and evaluate features that are relevant to their needs. And so the design was driven by usability and simplicity.

Every digital product operates with an overarching intent, and that intent ultimately shapes its UX (user experience) and UI (user interface). When the goal is to help users make informed decisions, the design reflects transparency and ease. But when the goal shifts to maximizing conversions, as is the case with many digital products, by getting people to click ‘buy’, dark patterns often creep in.

Dark patterns are essentially manipulative design practices that push users to act not out of genuine need, but due to psychological triggers such as FOMO, confusion, guilt, urgency and many times plain subterfuge. We have all encountered them: “Only two left at this price”, “Hurry, offer ending soon”, or “Leave now and lose your discount”.

Now imagine these tactics being applied to financial products, especially insurance, which is meant to provide long-term financial protection for you and your family. The consequences are far more serious because the moment of truth for such products may come years later. Buying insurance for any reason other than actual need is a mistake.

Recognizing this, the Insurance Regulatory and Development Authority of India (Irdai) issued guidelines on 2 April in which it asked insurers and regulated digital platforms to comply with the Prevention and Regulation of Dark Pattern guidelines issued by the Central Consumer Protection Authority in 2023.

These guidelines essentially aim to prevent deceptive UX and UI practices. Irdai has given 15 days to conduct a self-assessment and one month to submit a clean-up action plan. Ann Jacob goes behind the curtain to show how insurers are using dark pattern tactics to get you to buy policies that may be difficult to cancel later, sign up for auto debits without your knowledge and add features you do not need.

In the investment space, Mint Money this week captures two broad trends, both linked to market volatility arising from the West Asia war. The first story looks at the renewed interest in defence and energy sectors amid geopolitical tensions, which have brought these sectors into the spotlight. While the broader markets have been in a downward spiral until the ceasefire, pausing briefly whenever there was positive news, the performance of defence and energy stocks has been slightly different.

The Nifty India Defence Index has been volatile, with sharp sentiment-driven spikes followed by quick corrections. In contrast, the Nifty Oil and Gas Index has remained relatively stable. To make sense of the renewed interest in these sectors, Anagh Pal spoke to experts to explain how such sectoral rallies, especially those driven by war, tend to be short-lived. Investors often enter near the peak and risk suboptimal outcomes. Even amid the current euphoria, it is advisable to remain diversified through mutual funds and limit exposure to such sectoral bets to a small portion of the portfolio.

The second story is about Specialized Investment Funds or SIFs. Launched in 2025, this category now has 11 schemes with assets under management of around ₹10,600 crore as of March. Unlike mutual funds, which typically buy securities in the expectation that prices will rise and investors will benefit, also known as long positions where you buy low and sell high, SIFs can actively take both long and short positions using derivatives to generate returns.

In other words, SIFs can potentially make money even in a bearish market. This flexibility allows fund managers to take positions based on whether they expect prices to rise or fall and earn profits if their market view is correct.

Given this and recent market performance, SIFs have done relatively well, and that is largely why they are in the spotlight. However, their track record is limited, and it is still early days. Ananya Grover explores the category’s performance in this story and explains why, for now, SIFs are better suited as a tactical allocation to provide some hedge, rather than as a core part of a long-term portfolio.

Now, how you react to these market movements is not just influenced by your knowledge or the lack of it alone. It is largely guided by your money personality. If you are an avoider, you may simply sit out the current market correction and miss the opportunity to step up your SIPs. Someone who is financially anxious may struggle to handle the volatility, while a gambler may treat exactly these kinds of sectoral bets as core allocation, something we have been warning against.

What you do with your money is shaped by your behaviour. In this story, Shefali Anand takes you through different money personalities, how each can affect your financial health and what you can do about it.

And finally, Shipra Singh writes about the holiday season. Your plans to travel abroad, especially for a continental getaway, are facing a double whammy. The West Asia war is pushing up travel costs like airfares, a temporary ceasefire notwithstanding, while the depreciating rupee is making overseas travel even more expensive. Although the rupee has recovered some lost ground from its lows on the back of the Reserve Bank of India (RBI) measures and hopes of easing tensions, your European dream still remains expensive and may come with added logistical discomfort.

This season, the best holiday destinations may be inbound or oriented towards the East. Destinations in South East Asia, along with places like Japan, are options worth exploring if a holiday means stepping away from home turf.

In this week’s Mint Money Guru, Ananya Grover spoke to Rajeev Thakkar, chief investment officer and equity fund manager, PPFAS Mutual Fund. According to Thakkar, the fund used the market turbulence in March to its advantage by finding opportunities to deploy cash during the sell-off. He also explains why headlines around war and ceasefires have little relevance for long-term investing and how he is approaching equities in the current environment.

That’s all from the Mint Money team for this week. Have a question, an idea or feedback? Write to me at deepti.bhaskaran@livemint.com