Portfolio Allocation as Sensex, Nifty Stay Volatile Below 22,650: Where to Invest Now? Experts Explain Asset Allocation

Portfolio allocation is back in focus as Indian markets stay choppy. The Sensex today swung between 72,366 and 73,062 before trading near 72,534 around 2:53 PM on 30 September 2026, while the Nifty slipped below 22,650 to 22,648.90. With the Nifty heading for its worst September since 2018, many investors are asking where to invest and how much risk to take.

Market experts say the answer lies in portfolio allocation and asset allocation, the mix of equity, debt, gold and cash in your portfolio, rather than trying to guess the bottom. Here is what they recommend and how investors can apply it to their own portfolio allocation.

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Why Is the Market So Volatile Right Now?

Indian equities are under pressure from several directions. Foreign investors have been net sellers, US bond yields remain high, crude oil has swung sharply because of the West Asia crisis and India's 10-year bond yield rose to 7.12% on 28 September. The Nifty fell about 5.7% in September and is roughly 14% below its record high.

Market volatility like this can push investors into emotional decisions, such as selling at lows or chasing short-term rallies. A clear portfolio allocation plan helps avoid both mistakes.

Where Should Investors Put Their Money? What Experts Say

Look beyond equity: ICICI Prudential AMC's S Naren believes investors should focus on a broader asset allocation strategy rather than only equity. He sees small caps as expensive and dependent on flows, while large-cap valuations look more attractive, and he views banking and insurance as contrarian sectors to consider.

Keep SIPs running: Chandan Taparia of Motilal Oswal Financial Services has highlighted 22,500 to 22,800 as a key Nifty support zone. He says SIP investors should continue rather than react to short-term volatility, traders should avoid aggressive positions, and new portfolios should rely on bottom-up stock selection with some diversification into gold and silver.

Deploy cash in tranches and rebalance: Wealth advisers say investors sitting on cash can invest in two to three tranches instead of waiting for complete clarity. If equity has fallen below your target share because of the correction, rebalancing by adding to equity can restore your intended mix. For new money, flexi-cap, large and mid-cap, and multi-cap funds may offer more stability because fund managers can shift between market-cap segments.

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A Simple Asset Allocation Framework

There is no single right portfolio allocation for everyone, and no portfolio allocation stays fixed forever. The table below is an illustrative starting point for education only, based on common financial planning practice. Your actual mix should reflect your goals, age, income stability and risk tolerance.

Investor profile	Equity	Debt	Gold	Cash / liquid
Conservative	30% to 40%	45% to 55%	5% to 10%	5%
Balanced	50% to 60%	25% to 35%	5% to 10%	5%
Aggressive	70% to 80%	10% to 15%	5% to 10%	0% to 5%

Within the equity part of your portfolio allocation, many experts currently prefer a tilt toward large caps and diversified funds over pure small-cap exposure, given small caps' higher valuations. Money needed within the next one to three years should stay in debt funds or liquid instruments, not in high-risk equity funds.

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Practical Steps for Investors Now

• Review your goals: Base your portfolio allocation on goals and match each goal with the right asset class and time horizon.
• Continue SIPs: Regular investing lowers your average cost during falls.
• Rebalance, don't react: Bring your portfolio allocation back to target instead of making panic trades.
• Stagger fresh money: Invest lump sums in two to three parts over a few weeks or months.
• Hold some gold: About 5% to 10% in gold can reduce overall portfolio swings.
• Keep an emergency fund: Maintain liquid savings so you are never forced to sell equity at lows.

What to Watch Next

The October RBI policy, FPI flows, crude oil prices, US bond yields and September quarter earnings will drive market direction in the coming weeks. For the Nifty, the 22,500 to 22,800 zone is the key support to watch. Whatever the market does, a disciplined portfolio allocation reduces the need to predict it.

Bottom Line on Portfolio Allocation

With the Sensex and Nifty volatile and the Nifty below 22,650, experts say the smartest move is to focus on portfolio allocation rather than timing the market. Favouring large caps, continuing SIPs, investing in tranches and keeping gold and debt in the mix can help investors ride out volatility. Consult a SEBI-registered advisor to build an asset allocation suited to your needs.

Frequently Asked Questions on Portfolio Allocation

What is portfolio allocation?

Ans. Portfolio allocation is how you divide your money across asset classes such as equity, debt, gold and cash, based on your goals, time horizon and risk appetite. A good allocation helps manage risk when markets are volatile.

Where should investors put money when the market is volatile?

Ans. Experts suggest focusing on asset allocation rather than timing the market. Many see large caps as more reasonably valued than small caps, recommend continuing SIPs, deploying fresh money in two to three tranches, and keeping some allocation to gold and debt for stability.

Should I stop my SIP when Sensex and Nifty fall?

Ans. Most experts advise continuing SIPs during market corrections, since regular investing lets you buy more units at lower prices. Chandan Taparia of Motilal Oswal said SIP investors should continue rather than react to short-term volatility.

Are small caps or large caps better right now?

Ans. ICICI Prudential AMC's S Naren has said small caps remain expensive and dependent on flows, while large-cap valuations look more attractive. Banking and insurance were among the sectors he described as contrarian ideas.

How much gold should be in a portfolio?

Ans. Financial planners commonly suggest keeping about 5% to 10% of a portfolio in gold as a diversifier. The right level depends on your goals and risk profile.

What is the Nifty support level now?

Ans. Chandan Taparia of Motilal Oswal has highlighted 22,500 to 22,800 as a key support zone for the Nifty. The index traded near 22,650 on 30 September 2026.

Should I change my portfolio allocation after a market fall?

Ans. If your equity allocation has fallen below your target because of the correction, experts say it can be a good time to rebalance by adding to equity. Money needed in the short term should not be kept in high-risk equity funds.