Market Outlook 2026: According to Kalpen Parekh, 2025 was full of ups and downs, but despite this investors got good returns…
highlights
- The year 2025 is now at its last stage. In such a situation, it is important for investors to know how the last year was from the market point of view and what should be the strategy going forward.
- Kalpen Parekh of DSP Mutual Fund gives his views on market trends for 2025, investor experience and the changes required in the portfolio in early 2026.
- According to Kalpen Parekh, 2025 was full of ups and downs, but despite this, investors got good returns overall.
According to Kalpen Parekh, 2025 was full of ups and downs, but despite this, investors got good returns overall. He said the Indian stock market gave returns of around 6–7%. Investors whose portfolio included foreign shares, gold and silver gained 15–20%.
Why was 2025 a great year for SIP investors?
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Kalpen Parekh said that this year was very good for those doing SIP. The market fell between September 2024 and February 2025, which gave investors an opportunity to buy more units. After this, there was a sharp recovery in the market from March 2025.
He said that this revealed a new trend of money creation – i.e. units increased first and NAV increased later – this is the real wealth creation.
Was 2025 a ‘reset’ year?
To this Kalpen Parekh said that yes, it was indeed like that. After Covid, the market was continuously going up in one direction. In 2025, the market appeared to behave more balanced and realistic. Now the fluctuations have become normal, which is a healthy sign for the market. The same trend may continue in 2026 also.
How to see gold?
Kalpen Parekh says that it is not right to consider gold as just a “hedge against inflation”. He said gold should no longer be considered merely an “inflation hedge”. Kalpen Parekh does consider it a part of long-term wealth, but said it does not always work as an inflation-hedge. He said that gold has been a ‘store of value’ for 3000 years, but value creation happens only in stocks.
The veteran market guru said that gold anchors your portfolio when other assets are in trouble. However, considering the fluctuations of the market, it can be said that gold can also fall by 20–30%, hence it is wise to keep it in limited quantity (10–20%). He said that the stock market provides the best protection from inflation in the long run.
Why the rise in ETFs and passive investing?
Kalpen Parekh said that a large part of the large flows seen in ETFs are coming from institutional investors like EPFO. Apart from this, investment in gold and silver ETFs has increased. Multi-asset funds are also investing through ETFs. Passive investing is slowly becoming popular, especially for those who want to follow the market in an easier way.
The future of mid and small caps
Betting on mid and small cap stocks, Market Guru said that good investment has come this year. These categories are volatile in the short term, but make great money in the long term.
Kalpen Parekh believes that it is better to invest in these categories through mutual funds than buying stocks directly, because quality and governance are taken care of there.
What is the most important thing in investment?
Kalpen Parekh said that the needs of every investor are different. Some are investing for 30 years, some for 5 years. Therefore the same advice cannot apply to everyone. But one thing is common for everyone – it is important to stay invested. If you are doing SIP then you should not stop it, you should continue investing even in bad times. He said that real money is often made by investing in bad market times.
What did 2025 teach investors?
Kalpen Parekh said that what 2025 taught investors is that the market does not always move straight. Discipline, diversity and patience are the greatest strengths.
SIP and long term thinking is the safest path. The same mantra will work in 2026 too – investing with discipline, and patience in ups and downs.
What to expect in 2026?
Kalpen Parekh believes that more or less the same trends may continue in 2026 – a balance of large cap, mid cap, small cap, diversified portfolio and long-term investment mindset.
He also said that the market is not always stable, it goes up and down, hence investors should proceed with patience and disciplined strategy.
In which sectors money will be made in 2026
The veteran market mage has expressed the most confidence in BFSI (banking and finance) for 2026. He said that 30% of the profit of Indian markets comes from this sector. The credit cycle has been slow in the last two-three years, but now it has picked up and their valuations have normalized. He said that banks have performed very well in the last 5 years.
Market Guru’s second bet is on the IT sector. He said that investment in IT has been gradually increased. Selective investments can also be made in pharma and auto. He said that at present the growth in the consumption sector is slow, hence there is not a very aggressive stance on it.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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