One needs to guard against the desire to be a top performer at all times. Markets are not always rational and often go through bubbles. The most popular sectors during bubbles trade at exorbitant valuations and see a rise in their weights in benchmark indices. A top quartile performance during those times can be obtained only by going overweight on popular sectors. And what’s popular is seldom cheap – tech in 1999, infra and real estate in 2007, quality/ growth in 2020 and PSUs/Defense/ Railways in 2024.
Other things remaining constant, an underperformance versus the benchmark is a leading indicator of risk reduction during buoyant times.