Gold, silver or stocks in 2026? How to invest Rs 10 lakh in new year for balanced returns

For equity bulls who scoffed at non-yielding assets, 2025 delivered a brutal lesson in humility. While the Nifty limped to a mere 10.5% return, with the broader market posting outright losses, gold surged 75% and silver exploded with a staggering 183% gain, forcing investors to rethink asset allocation strategy.

Now, as 2026 dawns, the question haunting every investor is: chase the precious metals euphoria or bet on India’s equity comeback?

Dalal Street’s star fund manager S Naren of ICICI Prudential AMC has warned that precious metals are showing signs of euphoria but Indian equity markets should outperform most markets in 2026 after ending last year as the worst performer among major markets.

“We think at this point of time the best way to invest would be in the form of asset allocation and one can take a little bit of higher risk towards equity compared to where you were taking risk in 2025 January, simply because in the last one year Indian markets have underperformed most markets in the world,” Naren said.

With gold and silver riding unprecedented rallies and equities nursing wounds, wealth managers are advocating measured approaches but with a tilt back toward stocks.

Nilesh Shah, Managing Director at Kotak Mahindra AMC, laid out his firm’s current stance: “About 55% is equity, about 20% is precious metal, and 30% is fixed income. Now these numbers could go 1% or 2% here or there, but this is broadly the average. I think this is a fair allocation for an average risk taker.”
His outlook on equities is positive, with midcap, largecap and smallcap expected to perform in that order. On precious metals, Shah remains “positive but subject to central bank buying. The day the central bank sells, you also get out.”
Sunil Sharma, Chief Investment Strategist at Ambit Global Private Client, recommends a 12.5% allocation to gold and just 4-5% to silver for moderate-risk investors, with a dominant 72% equity allocation split across large (67.5%), mid (22.5%) and small cap (10%). The remaining 11% would go into credit, InvITs, and notably include a 6-8% allocation to REITs within the equity bucket, while avoiding duration.
Dhiraj Relli, MD & CEO of HDFC Securities, issued a stark warning about recency bias: “While asset diversification is an effective risk management strategy, investors should be cautious about chasing recent performance in asset classes like gold and silver, which have experienced significant rallies in recent months. Such one-sided moves can lead to exuberance and heightened volatility, making it prudent to avoid disproportionate allocations to these assets.”

Relli emphasized that gold and silver should be viewed “as portfolio insurance rather than primary growth drivers, where modest allocations help manage tail risks without creating concentration concerns.”

For younger investors in the 30-40 age bracket, Sunny Agrawal of SBI Securities advocated a more aggressive stance: 70% equity, 10% gold, 10% silver, and 10% bonds. “At this life stage, the individual typically has a relatively higher risk appetite and a longer investment horizon, which allows for greater exposure to equities,” Agrawal noted, adding that “periodic rebalancing and review aligned with financial goals and market dynamics is critical.”

As precious metals flash warning signs of euphoria and Indian equities emerge from their year of underperformance, the consensus is clear: diversification isn’t just prudent but essential.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)