The Indian equity markets have been nothing short of a rollercoaster thrill ride. From the March 2020 lows, the Nifty 50 more than doubled and sectors like railways, defence and infrastructure handed out multi-bagger returns like free festival sweets. Retail participation exploded too where SIP inflows touched ₹28,464 crore in July, with 9.44 crore SIP accounts buzzing with activity.

But here’s the catch: markets never move in one direction forever. Since the second half of 2024, we’ve seen the Indian equity market slip into a phase of consolidation. Nifty has struggled to break free, mid and small-caps corrected by 15–20% and global headwinds (wars, tariffs, currency jitters; the usual villains) have kept investor sentiment on edge.

For investors who chased every hot theme and shiny stock, this is your wake-up call: your portfolio may be carrying junk investments that silently drain returns.

During bull runs, everything looks golden. But when the music stops, you realise some of your “trophies” are really dead weights. Junk investments like overvalued, non-performing or short-lived investments are those impulse buys gathering dust in your cupboard.

Here are some red flags in today’s context

1. Overexposure to Thematic Funds
   Defence, PSU or infra funds may have looked like magic beans last year, but concentrated bets can turn ugly fast. Remember, PSU banks delivered 150% between 2020 and 2023, but in 2024–25, it has moved sideways with sharp volatility.

1. Mid and Small Cap Frenzy
   The mid-cap index compounded at 35% annually between 2020–23 and small-caps doubled. But SEBI’s early 2024 caution note on frothy small-caps? It played out as they corrected over 20% and mid-caps ranked as the worst-performing index globally in July 2025.
2. Pseudo Rallies
   Short-term rallies in sugar, textiles or penny stocks often look tempting, but most lose steam once liquidity dries up, leaving investors with paralyzed investments. Once the darlings of the stock market, like Waree Technologies, Dreamfolks, Vodafone Idea, Jupiter Wagons, Titagarh Rails, Firstcry, IndusInd Bank and Tata Motors, crashed up to 60%. Such multi-bagger hunts turned out to be one of the worst wealth destruction exercises.

Experts at MINTIT suggest trimming allocations to mid-cap, small-cap and thematic segments. High valuations and shaky liquidity mean they can still dent portfolios further.

The Party Is Over, Reality Is Back

In a bull run, even weak stocks dance. In a consolidation phase, only quality survives. As Salim Khan would say, “Jahan bat ghumao, wahi ball aati hai” but in investing, you can’t just swing at every ball. This is the time to defend your wicket and play for the long term.

Here’s how to clean and reset your portfolio:

• Relocate Towards Hybrid or Balanced Funds
  In July 2025 alone, hybrid schemes attracted ₹20,879 crore. Balanced advantage funds, too, pulled in ₹8,000 crore. With stable 8–10% returns, these act like shock absorbers in volatile times. Debt funds also saw massive inflows of ₹1.06 lakh crore, proving investors are running to safer shelters.
• Quality Over Hype
  Ditch the junk. Stick to funds with a track record across market cycles. Large-cap and flexi-cap funds that deliver steady 12–13% returns are your safe highway, while hype-driven bets are the potholes.
• Revisit Asset Allocation
  Got 20–30% in thematic or small-cap funds? Time to trim. Thematic funds have returned negative 3.5% in 2025 so far, while midcaps trade at pricey valuations. Instead, aim for a balanced mix: 60–70% in equity mutual funds, 20–25% in debt and 5–10% in gold ETFs.

Wealth Creation With MINTIT

Markets may have patches of gains and losses, inflows and outflows, but as disciplined investors, our job is to continue our SIPs irrespective of market conditions. With mutual fund assets under management (AUM) at Rs 75.36 lakh crore, SIPs in mutual funds are turning out to be a backbone of wealth creation.

This is where technology meets discipline. With the mutual fund distributor app of MINTIT, you can track, rebalance and manage your investments effortlessly. Planning for the future? Nothing beats a long-term SIP investment that compounds quietly while you go about life.

And yes, convenience matters. Today, you can invest in mutual funds online in just a few clicks, with tailored suggestions that match your goals. That’s why MINTIT is fast becoming the best direct mutual fund app for investors who value both simplicity and smart guidance.

Whether it’s saving for retirement, a dream home or your child’s education, MINTIT walks alongside you with professional insights, personalised strategies and the right funds at the right time. So, clean the junk, stick with quality and let your SIPs do the heavy lifting. Because in the world of wealth creation, it’s not about timing the market but about time in the market.