After a strong bull run, Indian equity markets have entered a challenging phase. The BSE Sensex has declined by approximately 11% over the past 2 years.
When returns disappoint, investors naturally start questioning their decisions:
- Are mutual funds still worth investing in?
- Is there any benefit to continuing an SIP?
- Would fixed deposits or real estate have been better investments?
These concerns are understandable. However, the risk lies in making long-term financial decisions based on a short-term experience.
1. Equity Market Uncertainty Is Part of Investing
Equity markets move through periods of growth, correction and recovery. Investors accept this uncertainty in exchange for the potential to earn higher long-term returns. However, higher returns are not guaranteed, and losses are possible.
The key is not to avoid uncertainty altogether, but to ensure your investments are aligned with your financial goals and ability to take risks.
2. Don't Judge Equity Investing by Just Two Years
Consider the Sensex’s performance over different periods:
| Investment period | Sensex return |
|---|---|
| Past 1 year | -11.8% |
| Past 2 years | -11.0% cumulatively |
| Past 10 years | 10% annualised |
Based on historical closing levels as of 9 October 2026. Price returns exclude dividends; the 10-year figure is annualised.
While recent returns have been disappointing, the longer-term picture offers a different perspective. This does not guarantee future returns, but it highlights why two years alone may not be enough to judge a long-term investment strategy.
An SIP encourages disciplined investing across different market levels, but it does not eliminate risk. What matters is the investment you choose, your time horizon and your ability to remain invested.
What about your SIP?
Suppose you invest Rs 1 lakh every month through a Systematic Investment Plan (SIP) for 10 years.
| Particulars | Amount |
|---|---|
| Monthly investment | ₹ 1,00,000 |
| Investment period | 10 years |
| Total amount invested | ₹ 1,20,00,000 |
| Future value at 10% annual return | ₹ 2,06,55,202 |
This is a hypothetical illustration assuming a constant 10% annual return, not an actual historical SIP result. Real equity returns fluctuate, and the final value could be higher or lower.
The point is simple: an SIP helps you invest regularly across different market levels. It does not eliminate risk or guarantee profits. Its effectiveness depends on the investment, the time horizon and your ability to remain invested.
3. Fixed Deposits, Real Estate or Equity: Which Is Better?
Each investment serves a different purpose.
- Fixed deposits offer relatively predictable returns, but inflation and taxes can reduce purchasing power.
- Real estate offers potential appreciation and rental income but comes with liquidity constraints and other costs.
- Equity mutual funds offer long-term growth potential, but their values fluctuate and losses are possible.
There is no single investment that is best for everyone. The right choice depends on your goals, time horizon, liquidity needs and risk tolerance.
4. What Should You Do Now?
Start by asking yourself: Are your financial goals clearly defined?
Have you planned for retirement, your children’s education and other important milestones?
If your retirement is 10–15 years away, a two-year market decline should be viewed in the context of your entire investment horizon. It may present an opportunity to invest at lower market levels, provided your financial situation and investment strategy support it.
Before making changes, review your financial plan rather than reacting to market headlines.
5. Diversification and Asset Allocation Matter
Indian equities, international equities, gold and fixed-income investments can behave differently across market cycles. Diversification helps reduce dependence on a single asset class, while asset allocation determines how much you invest in each based on your goals and risk capacity.
Rather than chasing whichever asset performed best recently, consider seeking guidance from a qualified financial planning professional to assess whether your portfolio remains appropriate for your needs.
6. Life Planning: Focus on What Matters
Financial planning is not just about building wealth. It is about using money to live the life you want, whether that means financial independence, spending time with family, travelling or pursuing personal aspirations.
Life Planning connects your financial decisions to the goals and experiences that matter most to you. When your goals are clear and your financial foundation is in place, daily market movements become less overwhelming.
Final Thought: Focus on Your Plan, Not the Noise
Two years of disappointing Sensex returns do not, by themselves, prove that mutual funds have failed, SIPs no longer work or another investment is always superior.
Before making an extreme decision, review your goals, time horizon, risk tolerance and asset allocation.
The real question is not, “What will the market do next?” It is, “Am I financially prepared for the life I want to live?”
Because the purpose of wealth is not simply to accumulate money. It is to give you the freedom, security and choices to live well.
At Niraj Nanal, Financial Life Planning, the focus is on helping individuals and families make informed financial decisions that align with their life goals.
Through comprehensive financial planning and Life Planning, he helps clients make informed financial decisions, plan for retirement and work towards long-term financial security.
