Experts recommend cautious investment strategies for FY26

Mutual fund experts are recommending a careful investment strategy for the upcoming financial year 2026. As global trade policies and economic growth remain uncertain, they advise investors to think long-term. Those who prefer less risk should consider debt funds, while those comfortable with market fluctuations can invest in equity. For long-term investors, an 80:20 ratio of equity to debt is suggested. Medium-term investors should aim for a 70:30 ratio, and short-term investors are advised to focus completely on debt investments. This strategy helps to create a balanced portfolio. Experts urge investors to be disciplined and align their portfolios with their long-term goals. First-time investors should clearly define their goals and risk tolerance before choosing an investment strategy. A mix of equity and debt can help diversify risk. So far in 2025, equity mutual funds have offered an average return of around 17%. Pharma and healthcare funds lead with returns of 17.43%. Mid-cap and small-cap funds have underperformed with lower returns in the single digits. Investors are cautioned against thematic and sector-specific investments, which can be risky. Fixed deposits are suggested for low-tax investors, while higher-tax investors might prefer arbitrage funds. There are various mutual fund options available, including large-cap and mid-cap funds, which can provide substantial growth. Looking ahead, experts predict high volatility in the market during the first half of FY26, followed by potential recovery in the second half. Despite challenges, India's economy is seen as fundamentally strong. Following a disciplined investment strategy will be essential to navigate uncertainties. Investors should assess their risk appetites and investment horizons to make informed decisions.