Building Wealth in Volatile Times: Strategies and Opportunities
Volatility is a function of uncertainty. Financial markets do not like a phase in which predicting the future becomes difficult. It increases the diversity of views within days and induces volatility. Decisions to buy or sell an asset and to manage portfolio risk become difficult. If you are a relatively new investor, you might stop your regular systematic investments as you are not aware of the cyclical nature of the markets.
Companies in wealth management, such as mutual funds, are reporting a resilient trend among Indian investors in their latest quarterly analyst calls. Despite a recent sharp selloff in the Nifty 50, systematic investment plans (SIPs) continue to gather momentum in March 2026.
There is a lot of noise about systematic investment plans (SIPs). However, the average holding period is less than four years for two-thirds of the investors. That means most of you who invest in various asset classes through mutual funds withdraw the money quickly, depriving it of the chance to grow.
The Securities and Exchange Board of India (SEBI) conducted an investor survey in 2025 and published it earlier this year. The stock market regulator found that as awareness of financial products increases, penetration rises. More than half of the households in India are aware of mutual funds. However, only 6.8% of them actually invest. Awareness of the stock market is around 50%, but only 5.3% of households invest in equity shares. There is very little awareness of other financial assets such as corporate bonds, real estate investment trusts (REITs), Infrastructure Investment Trusts (InvITs), and alternative investment funds (AIFs).
There is a hesitation about execution despite relatively high awareness about mutual funds and stocks. There is a fear of loss.
Getting over fear
While investing directly in the stock market is meant for those willing to learn and dedicate time to research, analysis, and reading, mutual funds are a simpler way to allocate investible money towards future financial goals. An underlying factor is that there is no short-term solution to wealth creation. Many of you are aware, but a large segment of the Indian population is not. You need to give your money adequate time to grow. Investing in equities for four years or less does not create wealth.
To build wealth, it is crucial to diversify your investments. Corporate bonds, REITs, and InvITs offer alternative avenues that can provide steady returns and reduce overall portfolio risk. Corporate bonds, for instance, can offer higher yields compared to traditional savings accounts or government bonds. REITs allow investors to participate in the real estate market without the need for direct property ownership, while InvITs provide exposure to infrastructure projects, which can be a stable source of income.
In conclusion, while market volatility can be daunting, it is essential to stay the course and focus on long-term strategies. Diversification, regular investments through SIPs, and exploring lesser-known financial assets can significantly enhance your wealth-building journey.
