There is turmoil in the stock markets around the world at this time. The reason for this is the Iran-America war, due to which rising crude oil prices and uncertainty regarding interest rates have increased the concern of investors. In such an environment, many investors are not able to understand where to invest their money and how to avoid risk.
Meanwhile, Nitin Kamath has given an important advice to retail investors. He says that for most people, diversification i.e. investing in different places is the safest and most effective way. This can give better returns in the long run and also reduces the risk.
Kamath said in a post on social media platform Many factors come into play in determining the correct performance of any portfolio. Such as cash flow, dividends, bonus shares, stock split, and buying and selling of shares. Connecting all these properly is quite a complex process.
According to Kamath, if investors invest their money in different sectors, themes and asset classes, then the risk is reduced to a great extent. He also gave an example in which an investor consistently achieved better returns than the market by creating a balanced portfolio.
At the global level, tensions like US-Iran conflict and Israel-Iran tensions have shaken the market. There is a danger of rapid inflation in oil prices, due to which the confidence of investors is wavering. Its effect was also visible on India's main index Nifty 50, which was in decline recently.
The account performance graph on Console may look just like a simple chart, and I wouldn't fault anyone for thinking so.
But in reality, the sheer number of edge-cases with payout/payin of funds and stocks, corporate actions, etc., took enormous engineering effort to get right. pic.twitter.com/L62iCYcFNO
— Nithin Kamath (@Nithin0dha) April 2, 2026
Usually, sleeping is considered a safe option in difficult times, but this time there is no stability in it either. At the same time, bond yields are increasing, which indicates that interest rates may remain high for a long time.
Kamath believes that no one can predict which asset will perform well in the future. In such a situation, the most sensible step is for investors to keep their portfolio balanced and keep investing even in the ups and downs of the market. Diversification acts as a strong protective shield for investors. This not only reduces the risk, but also protects from big losses during market decline. Therefore, in uncertain times this strategy proves to be most effective.
