Alpha in a volatile world: Finding winners in changing markets

Geopolitical risk has stopped being slow-moving. It is now, increasingly, the fastest-moving risk in any portfolio.

• High valuations; earnings growth to boost 2026 returns
• AI disruption makes active investing and stock picking crucial
• India's market outlook brightens with better valuations and earnings

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The investing environment of the last two years has been simultaneously generous and unforgiving. Equity markets moved higher, but the gains were narrow, concentrated, and increasingly hard to justify on fundamentals alone. As we enter 2026, the S&P 500’s forward earnings yield sits near parity with the 10-year US Treasury, an equity risk premium of just 0.02%, among the lowest on record. For investors accustomed to riding beta, the question is no longer whether valuations are stretched. It is what to do about it.

With valuations stretched, the next phase of market returns will depend far more on earnings growth than on multiple expansion, a meaningful regime shift for investors accustomed to rising markets lifting all boats. Adding another layer of complexity is AI, which is the decade’s biggest structural opportunity and its most disorienting source of disruption. BlackRock’s 2026 Investment Outlook calls this environment ripe for active investing, specifically, picking winners and losers from among the builders now and later, as AI gains start to spread across the economy. The logic is simple: when everything is correlated to the AI trade, true differentiation matters more, not less.

Morgan Stanley’s Chief Investment Officer for Wealth Management puts it plainly: GenAI raises the value of active portfolio positioning, making diversification harder to achieve but more necessary than ever, and the mandate is to differentiate true AI winners rather than chase broad tech exposure. This is precisely the skill that separates conviction investors from noise-followers. Evanston Capital’s 2026 outlook identifies several converging factors creating a stock-picker’s market: dispersion between stocks has expanded meaningfully, and managers developing differentiated multi-quarter or multi-year views based on rigorous research face less competition today than in years past.

India offers a particular case study of what this means in practice. After a bruising 2025 marked by earnings downgrades, FPI outflows, and a valuation correction, the picture is shifting. VanEck notes that India enters 2026 with more realistic earnings expectations, healthier valuations after last year’s pullback, and early rate cut support. J.P. Morgan’s analysis puts MSCI India consensus earnings growth at 13% for calendar year 2025/26 and 16% for 2026/27, a recovery arc that rewards patient, bottom-up investors who looked through the noise. Within the market itself, 2025 was a year where index direction was limited, but underlying stock performance diverged meaningfully across and within sectors. In sideways markets, company-specific fundamentals matter more than broad themes, and a bottom-up approach dominates.

At the IDFC FIRST Bank presents Moneycontrol Global Wealth Summit 2026, four investors who have built records across exactly these kinds of markets will take the stage. Maran Govindasamy, Co-founder & Executive Director of Unifi Capital; Rajeev Thakkar, Executive Director of PPFAS Mutual Fund; Sunil Singhania, Founder of Abakkus Asset Management; and Sridhar Sivaram, Investment Director at Enam Holdings, will discuss how they identify structural opportunities amid AI disruption, navigate shifting economic cycles, and find the long-term winners that most portfolios are still missing.

Discover how leading investors are identifying the next market winners. Join the discussion at the Moneycontrol Global Wealth Summit 2026.

Register now: https://www.moneycontrol.com/msite/global-wealth-summit