The recent turbulence in global financial markets, triggered by Donald Trump’s shifting tariff policies, has once again put investors on edge. In a dramatic move dubbed “Liberation Day”, Trump announced steep tariffs that rattled markets worldwide, leading to the FTSE 100 experiencing its steepest single-day fall in over five years. On 4 April, the UK index dropped 4.86%, stoking fears of inflation and a looming global recession.
Irish pension holders were among those hit hardest, with an estimated €6 billion reportedly wiped off the value of pension funds in the fallout. But financial experts are urging calm – and advising long-term investors to stay the course.
Tariff U-turn Brings Mixed Market Reactions
Despite insisting his policies were “set in stone”, Trump reversed course just days later, announcing a 90-day pause and scaling back tariffs on EU goods from 20% to 10%. However, in a move that intensified tensions with China, tariffs on Chinese imports soared to 125%.
The response from the financial markets was swift. The S&P 500 climbed by 9.5%, while the Nasdaq jumped by 10%. These swings highlight just how reactive global markets can be – and why pension savers shouldn’t let short-term volatility derail their long-term investment strategy.
Experts Agree: Stay Invested and Diversify
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, emphasises the importance of long-term thinking. Speaking to PensionsAge, she warned against knee-jerk decisions such as halting contributions or changing investment strategies during market downturns.
“Pensions are long-term investments,” said Morrissey. “Sudden changes can lock in losses and limit future growth. A well-diversified portfolio is key to weathering market ups and downs.”
Tom Stevenson, investment director at Fidelity International, echoed that sentiment, adding: “Volatility is part and parcel of investing. But it’s not the same as risk. By holding a mix of assets, keeping a cash buffer, and continuing regular contributions, investors can stay on track to meet their retirement goals.”
Here is the summary data of average yearly returns for the S&P 500 over the last 5 years to 150 years.
Years Averaged (as of the end of February 2025) | Stock Market Average Return per Year (Dividends Reinvested) | Average Return with Dividends Reinvested & Inflation Adjusted |
150 Years | 9.366% | 6.97% |
100 Years | 10.49% | 7.31% |
50 Years | 11.95% | 7.982% |
30 Years | 10.714% | 7.984% |
20 Years | 10.392% | 7.618% |
10 Years | 12.993% | 9.576% |
5 Years | 14.322% | 9.623% |
The Power of Long-Term Investing
Across the industry, there’s a consistent message: resist the urge to react emotionally during market dips. Paul Nicholson, head of investment strategy at Davy, told The Business Post that market pullbacks are normal – and often fleeting.
“Short-term volatility can feel significant, but staying invested allows you to benefit from compounding returns and long-term growth,” he said. “Trying to time the market rarely works. Instead, focus on global diversification and a long-term outlook.”
Irish Life’s Advice: Don’t Let Fear Dictate Your Decisions
Ireland’s largest pension provider, Irish Life, also advises against panic. “Market uncertainty can prompt emotional decision-making,” a spokesperson said. “It’s tempting to move your retirement savings to cash or low-risk funds, but history shows that staying invested is the most effective way to grow your pension over time.”
Final Thoughts: Focus on the Future
While Trump’s tariff policies may continue to shift unpredictably, one thing remains clear: the best approach for pension investors is to remain calm, stick to a diversified investment strategy, and focus on long-term goals. By resisting the temptation to make reactive decisions, you’ll be better positioned to enjoy a financially secure retirement.
Looking for personalised advice?
Contact Riordan Financial today to tailor a pension and investment strategy that aligns with your long-term financial goals. Let’s secure your future – one smart decision at a time.
Warning: Past performance is not a reliable guide to future performance.
Warning: Benefits may be affected by changes in currency exchange rates.
Warning: The value of your investment may go down as well as up.
Warning: If you invest in these funds you may lose some or all of the money you invest.