Investing in 2026: It is no different from the years gone by—but here’s advice for the New Year

Mint illustrated how stock picks by experts and well-known financial institutions did worse over the years than the average stock. You are literally better off throwing darts at a board.Bloomberg analysed annual US index projections over several decades from all well-known banks and Wall Street firms and found them to be off by an average of 15 percentage points—meaning they were not worth the paper they were written on.However, for this year, there is something that gives me a pointer to what may happen in Indian markets.

Lately, most media people and experts have been enumerating risks in the market.Also, most investors are questioning themselves as to why they are investing in Indian stock markets when everything from fixed deposits and gold to US markets has given better returns this year. After all, the Indian market has been in the bottom 10% globally.The sentiment is downbeat partly because the average stock has not even done as well as the index.

Here is the kicker: sentiment is a contra indicator. When there is uncertainty, fear, anxiety, and questions like this abound, the next period’s returns are usually above normal.When 30% returns appear to be available for the taking, as was the case in the first 8-9 months of 2024, you should be wary.By this yardstick, the returns in 2026 may well be better than what we have seen of late because history shows that sharp market rises come at a time of such despondency.

So, the lesson is to stay invested to the extent of your equity allocation, which should not be 100% of your investment portfolio.Then comes the hard part. Once the new year festivities have died down, take out a couple of hours and look at all your investments.