June Market Pulse - The point to maximum return is the point of maximum uncertainty!

"You cannot sow something today and reap tomorrow! A seed has to go through the various seasons before it turns into a fully grown tree. So is the case with Investing." - Parag Parikh

If you have felt frustrated with equity investing over the last 18 months, you are not alone.

NIFTY fell this month by 2% in May 2026. YTD, NIFTY has fallen by ~10%.

Performance down the capitalisation curve is looking slightly better. Small cap has risen by 4%, mid cap by 1%, and large cap by 6% year-to-date.

• On a m-o-m basis, Telecom, Healthcare and Cap goods sectors witness the sharpest rise in May 2026, while PSU, Oil & Gas and FMCG saw the sharpest decline m-o-m.

• IT, Real estate, and FMCG delivered the lowest returns YTD.

Since September 2024, Indian equity investors have experienced one of the most challenging periods in recent memory. Despite India’s strong economic fundamentals, markets have struggled to make meaningful progress. Returns across many portfolios have been flat, and in some cases, negative.

At the same time, investors have had to navigate an endless stream of negative headlines:

• Escalating conflict in West Asia

• Rising crude oil prices

• Concerns around inflation

• Global trade tensions

• FII selling

• Slowing earnings growth

• Fiscal tightening concerns

The natural question many investors are asking today is:

“Why should I continue investing in equities if nothing seems to be working?”

Ironically, history suggests that this is often the exact moment when long-term opportunities become the most attractive.

Markets Reward Patience, Not Comfort

One of the biggest misconceptions in investing is that the best returns are earned when everything looks positive.

The reality is usually the opposite.

The highest future returns are rarely available when investors feel confident.

They are typically available when investors feel uncertain.

When headlines are negative.

When markets are volatile.

When investors are questioning their decisions.

In other words, the point of maximum uncertainty often becomes the point of maximum opportunity.

What History Tells Us

The current environment feels uncomfortable.

But it is far from unique.

Indian markets have faced similar periods before:

• The Global Financial Crisis (2008)

• The Eurozone Crisis (2011-12)

• Demonetisation (2016)

• COVID-19 (2020)

• Russia-Ukraine Conflict (2022)

Each of these events felt different at the time.

Each created genuine fear.

And each convinced many investors that “this time is different.”

Yet markets eventually recovered and went on to create substantial wealth for patient investors.

The lesson?

The future is never clear when opportunities are available.

If it were clear, markets would already be much higher.

Why The Current Situation Feels Worse Than It Is

The ongoing conflict in West Asia has undoubtedly created uncertainty.

Oil prices have risen sharply, and concerns around the Strait of Hormuz have dominated financial headlines. Both SBI Mutual Fund and Kotak Mutual Fund note that the disruption has become one of the most closely watched global risks in recent months.

But there is an important historical observation.

War-related oil shocks rarely last forever.

SBI Mutual Fund’s research highlights that major geopolitical oil shocks—from the Gulf War to the Russia-Ukraine conflict—have typically led to temporary spikes followed by eventual normalisation as markets adjust and supply chains adapt.

Markets understand this.

That is why despite the conflict, equity markets have not reacted anywhere near the magnitude one would expect if investors believed these conditions would persist indefinitely.

The Opportunity Hidden In Plain Sight

What has changed over the last 18 months?

Valuations.

A year and a half ago, investors were worried that Indian equities had become expensive.

Today, that concern has moderated considerably.

Earnings growth may have slowed temporarily, but prices have already adjusted to reflect many of these concerns.

Meanwhile:

✔ India’s long-term growth story remains intact

✔ Corporate balance sheets remain healthy

✔ The banking system is strong

✔ Domestic SIP flows continue to provide stability

✔ Earnings are expected to improve as the base effect normalises

Most importantly:

The market has already spent nearly 18 months digesting bad news.

Why SIP Investors Have An Advantage Right Now

For investors running SIPs, this environment is actually beneficial.

When markets move sideways for extended periods:

• More units are accumulated

• Volatility works in the investor’s favour

• Future compounding improves once earnings recover

The hardest periods emotionally often become the most rewarding periods financially.

Not because investors timed the market perfectly.

But because they simply stayed invested.

What Should Investors Do?

The answer is surprisingly simple.

Not because the environment is easy.

But because the data is clear.

Continue your SIPs.

Maintain your asset allocation.

Avoid making decisions based on headlines.

Focus on your goals instead of market predictions.

Because history repeatedly shows that investors who abandon equities during periods of uncertainty often miss the strongest phases of recovery.

Looking Ahead

Nobody knows what markets will do over the next three months.

But investing success has never depended on predicting the next three months.

It has depended on positioning for the next three years.

Today, we have:

• Elevated uncertainty

• Moderate valuations

• Improving earnings expectations

• Cautious investor sentiment

Historically, this combination has produced attractive long-term outcomes for patient investors.

Final Thought

The greatest opportunities in investing rarely arrive with confidence.

They arrive disguised as uncertainty.

They arrive when headlines are uncomfortable.

They arrive when investors are tired.

And they arrive when many people begin questioning whether investing is worth it at all.

Which is precisely why the point of maximum uncertainty often becomes the point of maximum return.

If you’re unsure whether your current portfolio is positioned correctly for the next market cycle, feel free to reach out to the Sage Capital team for a portfolio review.

Warm Regards,

Nikhil Gupta

Sage Capital

Clarity in chaos.

Discipline in volatility.