What the periodic table shows
The periodic table shows how leadership rotates across asset classes. In 2016, silver was the best-performing asset class. In 2017, small-caps led. In 2018, government securities (G-Secs) topped the chart. In 2019, the Standard & Poor’s 500 Index (S&P 500) was the best performer, and so on.
“The constant reshuffling of leadership clearly challenges the notion of any asset being a perennial winner,” says Pratik Oswal, chief of passive business, Motilal Oswal AMC.
Returns are regime-dependent. “There is no permanent leadership of any asset class as markets are cyclical. They react to the changing macroeconomic factors like interest rates, GDP growth, inflation, and so on along with global geopolitical uncertainties,” says Aparna Shanker, chief investment officer (equity), The Wealth Company Mutual Fund.
An asset’s long-term point-to-point return may look strong. But it can hide extended periods of underperformance in between. The periodic table highlights that short-term returns across asset classes are uneven, volatile and unpredictable.
Role of each asset class
A long-term portfolio should include a mix of asset classes. “Include equities for growth (across market caps), debt for stability and liquidity, gold as a hedge against macro and currency risk, and global assets for geographical and economic diversification,” says Oswal. Investors may also add real estate investment trusts (Reits) to the mix.
Investors should not overlook debt instruments despite their single-digit returns in most years. “During equity market corrections, debt instruments typically act as stabilisers and capital preservers. High-quality debt shows a far more muted reaction during sharp market sell-offs,” says Vishal Goenka, co-founder, IndiaBonds.com
Exposure to global markets can rescue a portfolio in years when the Indian market has underperformed. “In 2019, when Indian equities struggled, the S&P 500 delivered nearly 29 per cent return,” says Alekh Yadav, head of investment products, Sanctum Wealth.
A 15 per cent to 20 per cent allocation within the equity portfolio to foreign equities will likely suffice. Over-allocating based on recent performance must be avoided. “There is a clear recency bias driven by strong US economic growth and technology-led rallies,” says Feroze Azeez, joint chief executive officer (CEO), Anand Rathi Wealth.
Strong recent performance also explains the massive increase in the assets under management of gold and silver funds and exchange-traded funds (ETFs).
“In 2024–25, elevated uncertainty from inflation and tariff risks supported gold and silver. Similarly, precious metals outperformed in 2020 amid Covid disruptions, while in 2021, as uncertainty eased, equities rebounded and investors booked profits in gold and silver,” says Yadav.
Azeez, however, cautions that commodities are demand–supply driven, volatile, and hard to predict over time. For most investors, an allocation of about 10 per cent to gold and 5 per cent to silver should suffice.
Avoid behavioural traps
Many novice investors try to time the market or chase performance. They enter an asset class that has done well recently, hoping to ride the trend and exit before the cycle turns. The periodic table shows why this approach fails.
“The periodic table of returns visually demonstrates mean reversion in action by showing that the best performer in one year often becomes among the worst in the next, thus showing a pattern impossible to predict in advance,” says Abhishek Kumar, Sebi-registered investment adviser and founder, SahajMoney.com.
Besides over-allocating to recent outperformers, recency bias also leads to investors quitting recent underperformers. Investors exiting small-cap funds in recent months is a typical example. The periodic table of returns, which shows that both underperformance and outperformance are temporary, helps investors avoid this tendency.
It also helps investors avoid the tendency to stop their systematic investment plans (SIPs). “These are precisely the periods when SIPs work best through rupee-cost averaging. Discontinuing them hurts long-term compounding,” says Azeez.
The table can also counter herd behaviour, which pushes investors into popular, high-performing assets. “By the time an asset becomes popular, its peak performance may already be over,” says Shanker.
Takeaways for portfolio construction
The periodic table provides a clear lesson: investors should build a diversified, multi-asset portfolio. “Diversification can turn the volatility evident in a periodic table into a more stable return stream. It helps investors capture some of each year’s best-performing assets while avoiding concentration in a single laggard asset,” says Kumar.
Diversification also improves risk-adjusted returns. “Diversification is not a drag on returns; it is a risk-management tool. Indian investors often overweight equities during bull markets and underweight diversifiers such as debt and gold, only to regret it during drawdowns,” says Oswal.
Sticking to asset allocation matters. “Allocations should be tweaked only marginally within a defined range,” says Yadav.
(The writer is a Mumbai-based independent journalist)
