 "How fear and greed shaped investments in 2025 & what 2026 may hold")
In a year dominated by dramatic global shifts and sharp swings across asset classes, it was investor behaviour, not just market performance, that told the real story of 2025. From unwavering SIP commitments to frenzied bets on silver and high-beta themes, retail investors revealed how emotion continues to shape financial decisions. Experts say these patterns hold important lessons for navigating 2026 with more discipline and less noise.
Investors stayed disciplined, but chased frenzies
A standout trend was the growing resilience of SIPs.
Thomas Stephen, director and head-preferred, Anand Rathi Share and Stock Brokers Limited, notes that monthly SIP flows “continued to remain strong”, calling it a clear marker of rising investor maturity.
Sachin Jain, managing partner, Scripbox, echoes this, observing “increased longevity and consistency of Systematic Investment Plans”, despite volatility through the year.
Yet the discipline coexisted with herd-like impulses.
Stephen highlights a “wholesale” rush towards precious metals, particularly silver, while Jain points to the frenzy around high-beta sectors fuelled by the optimism of late 2024. As Jain notes, themes such as defence, pharma and infrastructure saw “complete frenzy”, but many stocks from these sectors eventually “lost more than 60-70 per cent of their market capitalisation”. Check Income Tax Calculator
Silver and F&O
Silver became the most visible example of emotionally driven investing. Stephen says the metal delivered “nearly 100 per cent returns”, sparking record inflows into paper silver and forcing some AMCs to temporarily pause subscriptions. Imports surged to around 4,000 tonnes by September, yet demand still outpaced supply, further inflating prices.
At the same time, Jain points to Sebi’s study showing that 91 per cent of retail F&O traders incurred losses, with average losses exceeding one lakh rupees. He calls it a “classic instance where greed and fear shaped investor decisions”, as many traders chased quick gains despite the high probability of losses.
Costly behavioural mistakes
Experts highlight three recurring errors that dented portfolios in 2025:
Fear of missing out: Stephen notes that even seasoned investors felt compelled to buy silver amid overwhelming hype.
Holding on to laggards: Investors clung to underperforming stocks due to emotional attachment or past returns, which Stephen warns can “threaten long-term financial goals”.
Chasing high-beta themes: Jain stresses that hype-driven sectors collapsed once the frenzy faded, making this “one of the biggest behavioural mistakes of 2025”.
Global upheavals shaped sentiment
Global turbulence, from the US election outcome to West Asia escalations, added to investor anxiety.
Jain says 2025 was “truly a dramatic year”, with developments that should have triggered market crashes but ultimately did not. Nevertheless, many investors “exited due to fear of the unknown and never managed to re-enter”, while those who stayed invested benefited from market resilience.
Stephen adds that Trump-era tariffs, subdued global growth and persistent FII outflows further influenced domestic sentiment. Both experts advise tracking global cues while relying on long-term fundamentals and asset allocation.
The psychological traps to avoid in 2026
Looking ahead, both experts flag behavioural risks that could trip investors:
Action bias: Stephen warns that after a challenging year, hasty portfolio changes may do more harm than good.
Herd mentality: Jain expects continued crowd-driven rushes into metals or new themes.
Recency bias: Jain notes that muted equity returns could make investors doubt equities, even though discipline matters more than short-term performance.
The key lesson for 2026, both experts stress, is simple, stay disciplined, stay diversified and stay invested, regardless of the noise.