Equity vs gold vs silver: How investors should balance portfolios for 2026

How investors should position portfolios for 2026: Growth with guardrails

 

As markets head into 2026, the easy gains driven by liquidity and multiple expansion are largely behind us. What lies ahead, according to Mirae Asset’s 2025 outlook framework, is a more earnings-led, selective and asset-allocation driven market cycle.

 

The investment playbook for 2026 is not about chasing themes, but about balancing growth with stability, and risk with resilience.

 

Equities: Stay invested, but expect returns to be earned

 

Mirae Asset’s equity outlook suggests that Indian equities remain structurally attractive, supported by 6–6.5% real GDP growth, improving corporate balance sheets and a multi-year earnings recovery. However, returns in 2026 are expected to be more moderate and earnings-driven, rather than valuation-led.

 

 

Corporate earnings are projected to grow in the low-to-mid teens over the next two years.

 

Large caps offer relatively better risk-reward after valuation divergence in recent years.

 

Select mid-caps with scalable business models, governance clarity and earnings visibility continue to present opportunities, but stock selection is critical.

 

Portfolio Strategy & Fund Recommendation by Mirae Asset:

Equity:

• Bottom-up stock selection will be critical as earnings dispersion rises

• Goal-based asset allocation aligned to risk profile and time horizon remains essential

• Flexi-cap and multi-cap strategies may be preferred in the current environment

• Hybrid funds can help smooth portfolio volatility

• Investors with higher risk appetite may consider Consumption, Banking & Financial Services, and Infrastructure, where risk-reward appears favourable

 

Investor takeaway:

2026 is not a year for broad-based rallies. Equity portfolios should tilt towards quality, cash-flow visibility and balance sheet strength, rather than momentum or thematic excess.

 

Fixed income: The comeback asset in diversified portfolios

 

After several years in the shadow of equities, fixed income is reclaiming its role as a stabiliser and return contributor.

 

Mirae Asset’s outlook points to:

 

• A more stable interest rate environment
• Inflation moderating closer to long-term comfort bands
• Attractive real yields across segments of the yield curve
• This makes high-quality debt instruments—particularly short to medium duration funds and high-grade corporate bonds—relevant once again.

 

"Looking forward, domestic fundamentals appear resilient. Inflation is projected to remain within the target range over the coming year, and while fiscal consolidation may decelerate, its overall trajectory remains on course. The period is likely to be characterised by a prolonged policy pause, supported by liquidity measures that should enhance transmission. Although the possibility of rate cuts could emerge under conditions of subdued inflation or weaker growth, the threshold for such action remains considerably high. Against this backdrop, we continue to favor an accrual strategy," said Mirae Asset in its report.

 

On the Fixed Income side, the brokerage continues to favor an accrual strategy.

Mutual Fund categories which could be looked at could be:

• Low Duration Category

• Short Duration Category

• Corporate Bond Category

 

However, a tactical shift may be warranted if any of the following materialise:

India’s inclusion in the Bloomberg bond indices

• A favorable outcome in trade negotiations with the US or

• Large-scale quantitative easing by global central banks, driving down overall interest rates

Should these developments occur, they could open a brief window for duration opportunities, in which case a barbell strategy may be adopted.

 

Investor takeaway:

Fixed income in 2026 is not just about capital protection—it is about predictable returns and portfolio stability, especially in a market where equity volatility may rise.

 

Gold and silver: Diversification, not speculation

 

Precious metals remain a key pillar of portfolio construction—but with clear differentiation between gold and silver.

 

Gold continues to serve as a strategic hedge against geopolitical risk, currency volatility and financial market stress.

 

"Gold enters 2026 against a backdrop of continuing geo political uncertainty, sticky inflation in US, rate cut cycle and weak dollar echoing the dynamics of 2025. While recent price movements have elevated the risk, several macroeconomic and geopolitical factors continue to point towards a supportive environment for gold rather than headwinds. Central bank buying, uncertainty over trade disputes, and unresolved geopolitical tensions are expected to reinforce gold’s role as a safe-haven asset and support gold prices. Investment demand, which was a key driver of gains in 2025, retains significant potential. Even in a bearish scenario, investors are likely to maintain exposure to gold as a hedge against unpredictable global dynamics and elevated equity valuations," noted the report. 

 

Silver, while benefiting from industrial demand linked to energy transition and electronics, carries higher volatility and drawdown risk compared to gold.

 

"Following sharp price gains in 2025, prices are now at elevated levels, increasing the likelihood of higher volatility and intermittent downside risk. While near-term positioning appears stretched and silver is in overheated territory, Industrial demand growth and tight inventories continue to provide a supportive backdrop, suggesting any corrections are likely to occur within a broader positive long-term trend," said the report. 

 

Mirae expects Silver to have higher drawdown risk than gold, as Gold may find support from central banks at lower levels. Currently, within commodities, a balanced allocation between precious metals remains appropriate, with an equal emphasis on gold and silver at this stage. 

 

"A gradual tilt towards gold may be warranted if the silver rally shows signs of exhaustion, in order to manage risk along with an intent to book profits after this historic rally. Any fresh investments should now be ready for higher volatility, should come for longer horizon and seek to avoid excessive allocation at this stage," the report added.

 

Mirae Asset’s framework treats gold as a portfolio stabiliser, while silver is better viewed as a tactical allocation rather than a core holding.

 

Investor takeaway:

Gold deserves a permanent place in portfolios. Silver exposure should be selective, measured and aligned to risk appetite.