How to navigate a market when both equity returns and FDs are declining

Exposure to gold and longer-duration debt, and purchasing equity funds systematically as valuations soften can help investors navigate this phase

Returns from equities have shrunk over the past six months owing to tariff-induced volatility, high valuations, and declining earnings. Fixed deposit (FD) returns have also begun to fall, as banks cut their deposit rates in response to repo rate cuts. With their two favourite asset classes facing the heat, investors need to follow a well-considered strategy to handle these challenging times.

 

Underperforming assets

 

Several asset classes have underperformed in recent months. “If we look at returns at the end of financial year 2024–25, equity gave back some of the gains from past years and underperformed both debt and gold,” says