Summary of this article
Post-Covid investors face volatility after years of rising markets, highlighting longer investment horizons.
Kulkarni stresses learning, risk tolerance and human judgement alongside AI-driven investment analysis.
Investors should limit short-term bets while keeping most portfolios fundamentally long-term oriented.
At the Outlook Money Presents The Money Question event in Mumbai on September 23, 2026, HSBC Mutual Fund CEO Kailash Kulkarni spoke to Outlook Money Editor Nidhi Sinha about market volatility, the importance of a longer investment horizon and the role of human judgement in fund selection.
In the current volatile situation, where inflation is also high and interest rates are rising, what is in store for investors and what should be their strategy in this market context?
These are volatile markets and investors need to be guided, as this kind of volatility is something we haven’t seen in the past.
Fundamentally, the Indian story and the macroeconomic story are very strong. This volatility is simply near term noise which you will never see in the long term. If you look at the macroeconomic data, the GST (goods and services tax), the debt ratio of corporates, productivity and the profits companies are making, these are possibly the strongest numbers I have ever seen. While volatility hurts, it is not something we will live with, in the near future because the macros are very strong.
I see a lot of young investors who came into this post-Covid, relying on their own minds with no experience. What is your advice to them in terms of handling volatility?
The new investors who came in post-Covid haven’t seen a single down phase where they needed help. Whatever they invested in, it went up. It is only since the latter half of 2024 into 2025 and 2026 that there has been significant volatility; and certain investments over the last two years might have given negative returns.
This is the time they will understand why they shouldn’t just invest for the short term. If you only exist in the stock market for a one year period, it’s a toss-up. You need the ability to absorb loss. My advice to young investors is to learn by yourself, keep updating your learning, and have a longer term horizon.
Additionally, if you use AI (artificial intelligence) algorithms to do data analytics, remember that human intelligence is still important when it comes to fund selection. You must understand the philosophy of the fund house and what these people are doing when they are investing.
You raise a very pertinent point because there are so many external influences in the market. Still, you see so many recommendations floating around, and sometimes people just feel they are right. How do you fight that instinct, especially when peers are doing the same thing?
That is a question which honestly doesn’t have an answer, because financial behavioural issues just override logic. The urge to make more money, to chase the highest return and to make short term gains is very difficult to override.
You have to ask yourself: how much money out of 100 rupees are you willing to lose or take a risk on? If your answer is 20 per cent, then use that 20 per cent to do your trading and short-term investments. But at least 80 per cent should be structurally and fundamentally in long-term portfolios.
If you have a holding that is down, evaluate it, but evaluation does not necessarily mean change. If you refer to data from 1998-2000, 2008, 2012 and 2020, there were multiple periods where markets were flat or fell, but they recovered. Stick to your guns if where you're invested is the right place to be.
