Investment strategies for 2026 require a disciplined approach focused on goal-based investing and systematic wealth creation, according to Chirag Muni, Executive Director at Anand Rathi Wealth . With markets experiencing volatility and return-chasing proving costly for investors, the focus should shift toward building resilient portfolios through proper asset allocation and SIP discipline.

The Foundation: Goal-Based Investing

Goal-based investing serves as the cornerstone of any successful investment journey. Muni emphasizes that without clearly defined goals, investors cannot build effective strategies or determine appropriate implementation approaches. "It's like playing a cricket match without a target, you won't know the required run rate or approach," he explains.

The power of time and compounding becomes evident when examining SIP projections:

Once goals are established with specific amounts and timelines, investors can work backwards to determine investment allocation, risk tolerance, and leverage compounding effectively.

Strategic Asset Allocation Framework

India offers four primary asset classes for investors: equity, debt, gold, and real estate. However, Muni advocates focusing primarily on equity and debt for long-term wealth creation due to their non-correlated nature and easier management.

Based on extensive analysis of nearly 13,000 real estate portfolios, residential real estate delivered average long-term returns of 8-9%, significantly underperforming the Nifty's 12-13% returns over the same period. Real estate also presents liquidity challenges and requires substantial capital commitments.

Gold's performance since 2012 shows 8.56% annualized returns over three-year rolling periods, compared to 12.50% for the Nifty. Silver performed even weaker at 6-6.5%. On a risk-adjusted basis, equity demonstrates superior performance with Sharpe ratios above one.

Time-Based Allocation Strategy

The investment horizon determines optimal asset allocation:

With diversified equity-heavy portfolios and longer horizons, a 12% return expectation remains reasonable for strategic planning purposes.

Diversification Within Equity

Rather than falling prey to recency bias, investors should maintain balanced diversification across market capitalizations. Asset classes and mutual fund categories operate in cycles, with small-cap funds moving from underperformance five years ago to top quartile recently before correcting again.

Recommended equity allocation structure:

• Large-cap: 50-55%
• Mid-cap: 25%
• Small-cap: 25%

This structure helps manage market cycles and volatility over extended periods while capturing growth opportunities across different market segments.

Fund Selection and Common Pitfalls

Thematic and sectoral funds present timing challenges, being easy to enter but difficult to exit appropriately. Instead, diversified categories such as flexi-cap, multi-cap, and large & mid-cap funds offer better long-term prospects by allowing fund managers to adjust allocations dynamically.

Key fund selection criteria include:

• Fund manager's track record and stability
• Fund house reputation and consistency
• Appropriate scheme size
• Portfolio allocation patterns and risk behavior

Common investor mistakes during volatile markets include losing patience, panic selling during corrections, disappointment during flat markets, and inadequate portfolio review cycles. Regular portfolio rebalancing every 6-12 months remains essential for maintaining target allocations.

SIP Optimization and Step-Up Strategy

SIPs provide the most effective investment approach for both retail investors and HNIs by enforcing discipline and automatically managing market volatility. A 24-year study demonstrates that SIPs delivered better average entry points than lump-sum investments 80% of the time.

The annual SIP step-up feature offers significant acceleration potential:

Stepping up SIPs as income rises can significantly accelerate wealth creation while maintaining investment discipline.

Retirement Planning Reality Check

A ₹1.00 crore retirement corpus requires careful inflation adjustment for realistic planning. If current monthly expenses are ₹50,000, they could rise to ₹1.50-1.60 lakh in 15 years assuming 6-7% inflation. Consequently, today's ₹1.00 crore requirement translates to approximately ₹3.50-3.60 crore in 15 years, emphasizing the importance of working backwards from real expenses rather than headline inflation numbers.

2026 Investment Strategy

For investors entering 2026, Muni recommends a straightforward approach: start SIPs, implement annual step-ups, and maintain long-term asset allocation of 70-80% equity and 20% debt. The key lies in staying disciplined and avoiding reactions to short-term market noise while continuing investments during market corrections when income permits.

Anand Rathi Wealth is on the verge of achieving its ₹1 lakh crore assets under management milestone, with CEO Rakesh Rawal attributing the growth to an even mix of market performance and fresh client inflows. Speaking to ET Now, Rawal highlighted the company's strong momentum in both market-driven appreciation and new client acquisitions.

AUM Growth Driven by Balanced Factors

The wealth management firm has demonstrated impressive growth trajectory this year, with AUM rising by nearly ₹20,000 crore. Rawal explained that approximately 50.00% of this growth stems from market appreciation, while the remaining portion comes from new money inflows.

"Going forward as well, we expect a healthy balance between market-led growth and net inflows, while continuing to focus on acquiring new money," Rawal stated during the interview.

Margin Discipline Maintained Despite Reinvestment

Rawal emphasized that a 30.00% profit margin remains a structural floor for the wealth manager, supported by operating leverage and cost efficiencies. With turnover growing 21.00% year-on-year, the company has achieved incremental efficiencies across multiple cost lines, helping sustain margins even during continued franchise investment.

"There is no single cost line to cut. Efficiency across the board helps improve margins without hurting long-term strength," he explained. This approach demonstrates the company's commitment to maintaining profitability while investing in future growth capabilities.

Revenue Performance and Client Strategy

Addressing the divergence between revenue growth and inflow patterns, Rawal clarified that mutual fund distribution revenue growth of 21.00% compared to just 4.00% growth in equity mutual fund net inflows does not reflect increased client risk aversion. Instead, revenues remain closely linked to market movements and overall portfolio values.

The company continues to guide product allocation strictly by client objectives, targeting 14.00% to 15.00% returns at lower volatility levels, rather than making tactical shifts in product mix based on market conditions.

Financial Performance and Future Outlook

Despite reaching approximately ₹99,000 crore in AUM by the third quarter, Rawal indicated the company will retain its full-year guidance of ₹1 lakh crore, citing uncertain market conditions. Monthly net inflows remain robust at over ₹1,000 crore, providing a solid foundation for continued growth.

The firm's return on equity stands at 47.00%, which Rawal described as largely structural, supported by the company's cash-generative business model and consistent dividend payout policy of around 30.00%. "With disciplined capital retention and steady profit growth, we expect to maintain healthy ROE levels over the medium to long term," he noted.

Anand Rathi Wealth's performance underscores the resilience of India's high-end wealth management segment, demonstrating how disciplined asset allocation and steady client inflows continue to support growth even amid market volatility.