The key, she emphasizes, is not to chase yesterday’s returns. Academic studies suggest that periods of weak investor sentiment often precede above-average returns, while times of over-optimism, such as early 2024, warrant caution. For global investors, this is an important reminder. Opportunities often lie where others see risks.
Reassessing Portfolios: Beyond FOMO
Mehra advises investors to take stock of their investments and focus on what really belongs in their portfolio. “Being invested doesn’t mean holding on to what you already own. For example, small and micro-cap stocks that boomed in 2024 won’t bounce back. New Year’s resolutions should be to go beyond the first two pages of your DP statement and cut out anything that doesn’t make sense.”
For HNIs and global investors, this could mean reshaping allocations across sectors and regions, focusing on quality names and undervalued opportunities rather than blindly following trends.
Gold, silver and global diversification
Although gold and silver remain part of a balanced portfolio, Mehra warns against over-reliance on precious metals. “Gold has been on a spectacular run, but historically it has been more volatile than stocks when measured in dollars. For example, the 1980 high was not surpassed for nearly 27 years and then fell 40%. Investing in gold should be a measured, single-digit allocation within a broader multi-asset portfolio.”Instead, investors now have access to global markets that go beyond just commodities. Mehra emphasizes that the US is not the whole world. Simply buying a few well-known US stocks or investing in the Nasdaq or the S&P 500 is not enough for true global diversification. Well-considered diversification across regions, sectors and asset classes is essential to manage risks and capture potential growth.
The way forward
For 2026 the message is clear. Cut emotions, reevaluate and diversify intelligently. Weak market sentiment offers opportunities, but requires discipline. Investors, both domestic and international, need to look beyond superficial trends, focus on quality investments and ensure their portfolio structure aligns with both long-term objectives and risk tolerance.In an increasingly interconnected world, the winners in 2026 will likely be those who embrace strategic diversification, remain patient and resist the pull of FOMO.
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(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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