Cut emotions, reassess, invest: Lessons for global investors in 2026
A tough year for Indian equities has triggered investor FOMO, but market veteran Devina Mehra argues that weak sentiment, not regret, should guide portfolio decisions. The focus, she says, must be on reassessment, quality investments and intellige...
By Anupam Nagar, ETMarkets.com |
ETMarkets.com
Weak sentiment is not a warning sign. It may be the opportunity investors are overlooking.
As 2025 draws to a close, many investors are reflecting on a challenging year for portfolios. Indian markets, for instance, have been among the bottom 10% of global market performance, prompting questions about missed opportunities in gold, silver and overseas equities. Yet, according to market veteran Devina Mehra, this “fear of missing out” (FOMO) is the wrong lens for making investment decisions.
“While broad indices such as the NSE 500 and BSE 500 show modest gains, the reality is harsher for individual stocks,” Mehra notes. “A large majority of stocks were down for the year. Seventy five percent fell more than 10%, and many declined over 20%. This is what investors should focus on, rather than comparing with other markets or regretting past decisions.”
The key, she emphasises, 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, like early 2024, warrant caution. For global investors, this is an important reminder. Opportunity often lies where others see risk.
Reassessing Portfolios: Beyond FOMO
Mehra advises investors to take stock of their holdings and focus on what truly belongs in their portfolio. “Being invested does not mean sticking with what you already own. Small and micro cap stocks that soared in 2024, for instance, may not bounce back. The new year resolution should be to go beyond the first two pages of your DP statement and cut out anything that does not make sense.”
For HNIs and global investors, this could mean reshaping allocations across sectors and geographies, focusing on quality names and undervalued opportunities rather than following trends blindly.
Gold, Silver and Global Diversification
While gold and silver remain part of a balanced portfolio, Mehra cautions against over reliance on precious metals. “Gold has had a spectacular run, but historically, it is more volatile than equities when measured in dollar terms. For instance, the 1980 high was not surpassed for nearly 27 years, and it fell 40% afterwards. Investing in gold should be a measured, single digit allocation within a broader multi asset portfolio.”
Instead, investors now have access to global markets beyond commodities. Mehra stresses that the US is not the entire globe. Merely buying a few well known US stocks or investing in the Nasdaq or S&P 500 is not sufficient for true global diversification. A thoughtful allocation across regions, sectors and asset classes is essential to manage risk and capture potential growth.
The Road Ahead
For 2026, the message is clear. Cut emotion, reassess and diversify intelligently. Weak market sentiment presents opportunity, but it requires discipline. Investors, whether domestic or international, should look beyond surface level trends, focus on quality investments and ensure their portfolio structure aligns with both long term goals and risk tolerance.
Also Read | Mutual funds increase cash allocation by over Rs 14,500 crore in 2025; 5 new AMCs join in
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
“While broad indices such as the NSE 500 and BSE 500 show modest gains, the reality is harsher for individual stocks,” Mehra notes. “A large majority of stocks were down for the year. Seventy five percent fell more than 10%, and many declined over 20%. This is what investors should focus on, rather than comparing with other markets or regretting past decisions.”
The key, she emphasises, 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, like early 2024, warrant caution. For global investors, this is an important reminder. Opportunity often lies where others see risk.
Reassessing Portfolios: Beyond FOMO
Mehra advises investors to take stock of their holdings and focus on what truly belongs in their portfolio. “Being invested does not mean sticking with what you already own. Small and micro cap stocks that soared in 2024, for instance, may not bounce back. The new year resolution should be to go beyond the first two pages of your DP statement and cut out anything that does not make sense.”
For HNIs and global investors, this could mean reshaping allocations across sectors and geographies, focusing on quality names and undervalued opportunities rather than following trends blindly.
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Gold, Silver and Global Diversification
While gold and silver remain part of a balanced portfolio, Mehra cautions against over reliance on precious metals. “Gold has had a spectacular run, but historically, it is more volatile than equities when measured in dollar terms. For instance, the 1980 high was not surpassed for nearly 27 years, and it fell 40% afterwards. Investing in gold should be a measured, single digit allocation within a broader multi asset portfolio.”
Instead, investors now have access to global markets beyond commodities. Mehra stresses that the US is not the entire globe. Merely buying a few well known US stocks or investing in the Nasdaq or S&P 500 is not sufficient for true global diversification. A thoughtful allocation across regions, sectors and asset classes is essential to manage risk and capture potential growth.
The Road Ahead
For 2026, the message is clear. Cut emotion, reassess and diversify intelligently. Weak market sentiment presents opportunity, but it requires discipline. Investors, whether domestic or international, should look beyond surface level trends, focus on quality investments and ensure their portfolio structure aligns with both long term goals and risk tolerance.
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In a world where global markets are increasingly interconnected, the winners in 2026 will likely be those who embrace strategic diversification, remain patient and resist the pull of FOMO.Also Read | Mutual funds increase cash allocation by over Rs 14,500 crore in 2025; 5 new AMCs join in
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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