Buy gold on corrections; rebalance silver via partial profit booking: Motilal Oswal PW

Synopsis Gold and silver experienced significant price volatility due to global uncertainty and shifting market trends. Motilal Oswal Private Wealth advises gradual accumulation of precious metals during dips for moderate returns. The report also outlines equity and fixed income strategies for 2026, emphasizing a balanced and disciplined approach. Gold and silver have seen big price movements in recent months, with strong rallies in the past year followed by sudden ups and downs. Both metals have recently been moving sharply as markets react to global uncertainty, changing currency trends and shifting investor mood. A report by Motilal Oswal Private Wealth recommends accumulating gradually during market dips for moderate returns over a medium term and consider partial profit-booking for large exposures in silver, and staggered accumulation on corrections for those with no-to-low exposure. Also Read | Silver ETFs crash up to 21%, gold ETFs slide 7% as bullion sinks on MCX. What should investors do? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » The release said that precious metals delivered exceptional returns, with gold and silver outperforming most assets classes over the past year. Gold’s rally has been largely structural and policy-driven, and we continue to view gold as a strategic portfolio asset amid ongoing fiscal imbalances, currency debasement, and an uncertain monetary policy outlook. On the other hand, silver’s sharp rally has been driven by structural supply constraints amid rising industrial demand from solar, EVs, and technology, though its higher volatility may warrant a more measured approach in 2026. Live Events According to Motilal Oswal Private Wealth, India’s relative valuation standing is strengthening after a consolidation-led 2025, supported by improving valuations, early signs of earnings recovery, domestic policy tailwinds, and conclusion of trade deal. Equity portfolio strategy For February 2026, Motilal Oswal Private Wealth recommended that while the large caps are entering the year strong, supported by reasonable valuations and better earnings visibility, the mid and small caps are also presenting good entry points. Budget announcements & trade deals are likely to have a positive impact on the sectors mainly represented in the mid and small cap segment. So, the portfolio focused on such sectors/stocks in the mid & small cap space are likely to benefit from the same. “As valuations and fundamentals improve selectively, 2026 is likely to reward execution and bottom-up stock selection rather than a broad-based, index-led rebound in the segment. Recommend investors to maintain a neutral view on equities,” the release further added. Post this, the indicative strategy is to allocate 50% to large caps and hybrids, 40% to mid and small caps, and 10% to global markets, large caps/hybrids to be a core allocation in portfolios. Complement it with staggered investing over the next 2-3 months in mid and small caps. Prefer index-led or hybrid strategies for large caps and active, focused strategies for mid and small caps and use lump-sum allocations in hybrid funds at current levels; adopt a staggered SIP/STP approach for pure equity strategies over the next 2-3 months. Fixed income On the fixed income front, most uncertainties appear to be behind us or largely priced in India’s fixed income market. With benign inflation, expected downward projections, and a likely softening by the US Fed, the RBI’s neutral stance is expected to remain data-dependent with room for further rate cuts during CY26. So, post considering the yields movement and other factors, investors should allocate 45-55% of the fixed income portfolio to performing credit and private credit strategies, selective infrastructure investment trusts (InvITs), real estate investment trusts (REITs), and non-convertible debentures (NCDs) for a minimum period of 3-5 years. InvITs may see some capital appreciation due to softening rates. Also Read | MF Tracker: Will this 3 and 5 year top performer PSU fund continue to maintain its rally? Secondly, for shorter holding periods, allocate in relatively liquid fixed income alternative solutions like Arbitrage Funds (three months minimum holding period), Hybrid SIF Funds (minimum two years), and Conservative Equity Savings funds (minimum three years). And lastly, consider tactical allocation to long-duration G-Secs (10 /15 year) at yield levels of ~6.8-6.9%/7.1-7.2%), for investors comfortable with duration risk, offering scope for capital appreciation and steady coupon income. “The shift from consolidation and global uncertainty in 2025 to a more balanced, execution-driven phase in 2026 marks an important inflection point for Indian markets. While global factors such as moderating AI momentum, geopolitical tensions and trade realignments will remain relevant, India enters 2026 on stronger footing with improving valuations, better earnings visibility and supportive policy tailwinds,” said Ashish Shanker, MD and CEO, Motilal Oswal Private Wealth. “In this environment, we favour stability through large caps and hybrid allocations, alongside selective accumulation in mid and small caps, especially in the first quarter. A balanced, disciplined portfolio approach with a long-term, execution-led focus remains key for investors,” Shanker added. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle. (Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. ...moreless (Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) 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