Asset allocation is key to generating wealth, and 2025 is a prime example to stress this point. Amid the clear outperformance by precious metals, any investor with just an equity-leaning portfolio has spectacularly missed out on the once-in-a-lifetime opportunity to tap into bullion gains.

Silver and gold prices recorded their best bull runs in 46 years, stressing the point of diversification in a portfolio as the returns offered by these precious metals helped offset the tepid and in some cases (such as small-caps) negative or no returns.

Silver prices zoomed 164% last year while gold rallied 73%. The Nifty 50’s10.5% returns appear minuscule amid this sharp climb. Now, with the onset of 2026, investors once again have the chance to rejig their portfolios as they approach investing with a new perspective.

Since both equity and commodity markets undergo cycles, analysts are now of the view that equities will make a comeback in 2026, suggesting a higher allocation to this asset class. The massive run-up in bullion does raise concerns that this rally might slow down or fade out.

From a portfolio construction perspective, investors should focus on balance and selectivity, as return dispersion is likely to remain high, said Seshadri Sen, Head of Research and Strategy, Emkay Global Financial Services.

How to invest ₹1 lakh in 2026? Check portfolio breakdown

Mint posed a question to three analysts about how investors can consider investing ₹1 lakh in 2026, and equity emerged as the preferred bet, especially for investors with a high risk appetite. Here’s what they recommended:

Betting on large-caps

Santosh Meena, Head of Research at Swastika Investmart, recommended putting ₹30-40% of the corpus in mid-caps and small-caps, 45%-60% in large-caps and 10-15% in precious metals.

• Mid & Small Cap Equities (30% – 40% | ₹30,000 – ₹40,000): This portion is your alpha generator. Since a sharp revival is expected in the broader market and earnings recovery, this segment offers the highest potential for capital appreciation, said Meena as the “pain” seen in 2025 has made valuations here more attractive for fresh entry.

• Gold & Silver (10% – 15% | ₹10,000 – ₹15,000): This allocation acts as your hedge. “The outlook for precious metals remains bullish following their stellar performance in 2025. You should maintain this exposure (preferably via ETFs) to protect the portfolio against volatility and currency risks,” he opined.

• Large Cap Equities (Balance | ~45% – 60%): The remaining capital serves as the core anchor of your portfolio. Large-caps provide stability and liquidity, ensuring you participate in the headline index’s move toward the 30,000 target while balancing the higher risk taken in the mid and small-cap segments, added the expert.

Risk-appetite-based equity allocation

Emkay Global’s Seshadri Sen also recommended an equity-leaning portfolio, with the only bifurcation on the asset allocation contingent upon risk appetite.

For an investor with ₹1 lakh and a moderate risk appetite, a diversified allocation would include a core exposure to large-cap stocks for stability, complemented by a higher allocation to mid- and small-cap stocks, which have potential to grow over a one- to two-year horizon due to stronger earnings growth, improving balance sheets and market-share gains, Sen said.

As for younger or higher-risk investors, Sen advised investing more aggressively toward mid-caps and small-caps. Meanwhile, conservative investors should maintain a higher allocation to large-caps and some exposure to debt or liquid instruments, as per the expert.

Keep it simple with MFs

Vaqarjaved Khan, CFA, Sr. Fundamental Analyst, Angel One, shared how mutual fund investors can structure their bets for 2026.

For young investors with a high-risk appetite, he suggested a ₹1 lakh allocation can be structured with a growth bias, with 40% in flexi-cap funds, 40% in Nifty 50 index funds, 10% in gold ETFs and 10% in debt funds aligned with medium-term market targets for 2026.

“While the new 12.5% LTCG tax without indexation marginally raises the effective cost on equities versus the earlier regime, it continues to reward long holding periods of one year or more for growth assets,” he said.

Commenting on MF strategy for investors with a more moderate risk appetite, he suggested allocation of 30% each in flex-cap and Nifty 50 index funds, complemented by 25% in debt funds and 15% in gold ETFs, helping cushion volatility while maintaining reasonable return potential.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.