Control Emotions & Avoid Over-Diversification: Sundeep Sikka Shares Key Rules For Long-Term Wealth Creation At Republic Summit 2026

Investors should assess their risk appetite, investment horizon and ability to ignore short-term market noise before starting their mutual fund journey, according to Nippon India AMC MD Sundeep Sikka, who said long-term discipline remains the cornerstone of wealth creation.

Speaking at the Republic Summit 2026, Sikka said investors must first understand whether they can handle market volatility before allocating money to capital markets. “The most important part is an individual’s own risk appetite,” he said, noting that investors who are uncomfortable with market turbulence should carefully evaluate their exposure to capital market-linked products.

Sikka also cautioned against copying the investment strategies of others, saying financial goals and risk profiles vary significantly across age groups and life stages.

An investor saving for goals three decades away will have a different approach from someone beginning to invest at the age of 50, he said.

The third factor, according to Sikka, is the ability to stay focused on long-term goals and avoid reacting to daily headlines, policy announcements, or geopolitical developments.

“Investment is a very boring game. You have to control your emotions and stay invested for the long term,” he said.

Investors Becoming More Mature

Addressing concerns around market volatility, Sikka said Indian investors have become more informed and resilient over the years.

He pointed to the continued growth of systematic investment plans (SIPs), noting that investors have largely continued their contributions despite fluctuations in equity markets.

According to him, the behaviour of SIP investors suggests a growing understanding that long-term wealth creation should not be influenced by short-term market movements.

How Many Mutual Funds Are Enough?

Sikka also weighed in on a common question among retail investors: how many mutual fund schemes should be part of a portfolio.

He said most investors do not need an extensive collection of schemes and that excessive diversification can often lead to overlap in underlying holdings. He said, “Ideally, a portfolio should not have more than seven or eight schemes," adding that, “A balanced portfolio can be built using a combination of large-cap, mid-cap and small-cap equity funds alongside fixed-income investments, depending on an investor’s risk profile.”

Sikka said passive investment products such as index funds are also gaining popularity among investors, mirroring trends seen in global markets.

According to him, five to seven well-chosen schemes are generally sufficient for most investors, with additional funds often adding complexity rather than meaningful diversification.

Also read: 'Teamwork Worked Wonders... We Succesfully Ensured Naxal-Free India': IG CRPF Rakesh Agrawal At Republic Summit 2026

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