A few weeks ago, saw one of those sector-performance charts published by ET Wealth, which showed which sectors performed best each year since 2015.

And social media was filled with posts tagging the same image, and everyone was like, “This is why diversification matters!”

Fair enough.

Then the usual chatter: “Is it time to move from IT to PSU Banks?” or “Which sector will lead in 2025?”

Saw the same on Twitter threads, WhatsApp groups, and Reddit comments, all full of hot takes and half-informed predictions.

But here’s what almost no one says: the real challenge is knowing when market cycles begin and end.

And even professionals struggle with that.

Howard Marks, one of the most respected global investors, wrote an entire book on market cycles and he openly admits that timing them is next to impossible.

That’s exactly why so many investors prefer mutual funds in India. We don’t have the time, tools, or temperament to figure out these cycles ourselves. Thus, we outsource it to a fund manager and let them handle the switches. 

And to be fair, this approach has worked well. 

India today has over ₹70 lakh crore in mutual fund AUM. Monthly SIP flows have crossed ₹18,000 crore. Investors have matured, and they are staying invested, avoiding panic, and thinking long term. 

I know of some investors that consistently make around 20% annually through their mutual funds portfolio. That’s pretty solid. 

But you know what, there’s a blind spot here. What happens when everything falls at once?

We saw it in 2008. Again in 2020 during COVID. And even recently in 2025 when tariff shocks rattled global markets.

During these events, diversification within just Indian equities didn’t help much. Most sectors  – IT, banking, FMCG – all fell together. 

When everything in a portfolio depends on a single macro environment, sector diversification within that system can only go so far.