In search of an ideal investment advice during war

For the past one month, social media has been full of asset managers, financial influencers and experts in the field trying to pitch in with investing advice when the Nifty 50 dipped more than 11% in March 2026 alone.

While mutual funds and major stocks are underperforming, the advice that markets will turn around after war-driven corrections and investors will gain has almost become a thumb rule today.

Some experts, however, caution that this time, it might not be the same and ‘buy the dip’ may just not be straight away the best investment advice.

“It does not look like a regular garden-variety correction. I think it is more of a one-time event in nature. This is because we haven’t seen this sort of hostility between nations since the Second World War and the current generation of investors have not been exposed to a war as serious as the one we are in now,” said U.R. Bhat, a veteran investor and Co-founder of Alphaniti Fintech.

No or extremely careful investment

“If Nifty breaks the 52-week low of 21,744 and trades below the number for one or two weeks, it is better new investors don’t enter the market,” Mr. Bhat said. Similarly, mutual fund holders with long-term goals like retirement can stay put. “If the SIP is for a specific target of say 2 years or 3 years then I don’t think that is right when the markets are too volatile and probably heading downwards,” he continued.

Some experts are slightly more optimistic but base it on calculations.

Sahil Kapoor, who heads product and market strategy at DSP Mutual fund, felt that since stock prices were 23-25 times consolidated earnings before and now have come down to 19, it is a good time to start buying stocks cheap as they can accumulate more units. Further, he said this was not for all stocks but those whose valuation multiples were way below fair value which he defined 17 to 18 times earnings, assuming a company has a 16% ROE and long-term average earning growth is 10-12%.

“Allocate assets to large bank for example. Today, private bank and some IT stocks’ price to book multiples are as close to as they were in global financial crisis,” he adviced.

When asked about the advice that one should not stop their SIPs as they turn around in the long term, Mr. Kapoor said that over 10 years, mutual funds provide the average returns of the market anyway.

Both the experts came out as voices of caution when asked about the ideal investors’ decisions.

There is a lot of talk on Indian investors maturing and the participation of domestic over foreign investors cited as a reason. Even a smart investment at this time is unlikely to yield results as foreign investors have been exiting the Indian stock market for a year now, not finding valuations attractive. The returns in dollars gets only worse with a quick depreciating rupee and still high oil prices.

Small SIP investors started leaving?

This too may partly be a narrative. Dhananjay Sinha, CEO and Head of Institutional Research at Systematix Research, says that whether Indian investors will “keep going” is a tricky question to answer.

“We found that the number of SIP’s have stagnated over the last one-and-a-half years. Whereas the per SIP value has increased by 20% during that period. It does look like that, smaller investors have vacated. The people who are a little bit affluent have the money, they have still been putting in the money.” Mr. Sinha said, adding that this is the broader sense one gets when looking at the data.

Further, he said people seem to be thinking that the war-led correction is temporary. While not denying that the end of war may cool investors down, he said the existing issue of tepid corporate earnings and not-so-cheap valuations even before the war still remained unsolved. Further a post-correction rally in the past has been due to government stimulus, the room for which may have reduced now. “I would say that buying the dip and so expecting a sharp rebound after the current scenario, may not be a right thing to really expect,” he added.

Investor awareness needed

There is a lot of content that is online and offline on investor awareness, but eccentric buying of expensive IPO stocks and entering gold rally at its peak may not signal investing maturity. Investors need to be made aware of the incentive structures that AMCs have, Mr. Bhat said. AMCs are in the business of acquiring new assets and charging a fee on that. The bigger the fund, the more the fees. This means that advising sale or pause on investments may not be in the interest of the asset managers.

SEBI’s own investor survey revealed that investors were aware of the stock market but a large share of them were making decisions based on finfluencers too. It is often difficult to differentiate an advertisement for a fund from a genuine “buy” call. To solve this, SEBI recently said that it was coming out with a framework for investor awareness which would have participation across different industry bodies and exchanges.

Investor awareness on what is a good investment and how to time them well, becomes important as the effect of widespread loss can be generational.

“If one generation of retail investors lose substantially in a fierce bear market, it is only the next generation that will venture to start investing, as the memory of the loss may make them averse to capital market investments, Mr. Bhat warned.

A reliable and concrete source of where and what to invest as well as when to hold or exit, has become more important in a highly volatile market where zero returns are starting to become more probable.

Published – April 04, 2026 07:41 pm IST