Market Volatility: Why Pension Investors Should Stay Calm

Recent swings in the global markets—sparked by Donald Trump’s erratic tariff manoeuvres—have reignited anxiety among investors. In a move dubbed “Liberation Day”, Trump announced sweeping tariff hikes that sent global stock indices into freefall. The FTSE 100, for instance, endured its worst single-day drop in over five years, tumbling 4.86% on 4 April. This sharp fall ignited fears around inflation and the potential for a global economic slowdown.

Irish pension savers were not spared. It’s estimated that some €6 billion was wiped off the value of pension funds during the initial fallout. But financial advisers are urging calm heads, reminding investors that short-term volatility is nothing new—and not a reason to deviate from long-term strategies.

Markets React Sharply to Tariff Flip-Flopping

Though Trump initially maintained his tariffs were “set in stone”, he abruptly shifted course just days later—announcing a 90-day pause and reducing tariffs on EU goods from 20% to 10%. At the same time, however, he ramped up tariffs on Chinese imports to 125%, intensifying the trade standoff with Beijing.

Markets responded swiftly and dramatically. The S&P 500 surged by 9.5%, and the Nasdaq jumped by 10%. These rapid rebounds highlight how markets often overreact in both directions—and why investors saving for retirement shouldn’t let short-term shocks cloud their long-term judgement.

The Experts Are Clear: Stay the Course and Diversify

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, stressed the dangers of emotional decision-making. Speaking to PensionsAge, she advised against halting pension contributions or adjusting investment allocations in response to market dips.

“Pensions are designed for the long haul,” Morrissey explained. “Reacting impulsively can crystallise losses and restrict your growth potential. A well-diversified portfolio remains your best defence during turbulent times.”

Tom Stevenson, investment director at Fidelity International, shared a similar perspective: “Volatility is a normal part of investing. But it’s not the same as risk. By diversifying across asset classes, maintaining a cash buffer, and staying consistent with contributions, investors can remain on track.”

Historical Perspective: The Strength of Long-Term Investing

Here’s how the S&P 500 has performed over different timeframes, demonstrating the resilience of long-term investing:

Don’t Let Emotion Lead Investment Decisions

Paul Nicholson, head of investment strategy at Davy, told The Business Post that downturns are both natural and usually temporary.

“Volatility can feel unnerving, but it’s part of the journey. Staying invested means you continue benefiting from compounding returns and potential market recoveries,” he said. “Trying to time the market almost never works. A global, diversified approach with a long-term lens is far more effective.”

Ireland’s largest pension provider, Irish Life, echoed this guidance. “Uncertainty often triggers emotional reactions,” a spokesperson noted. “But history tells us that staying invested—rather than shifting to cash or low-risk assets—is the smarter long-term strategy.”

Final Thoughts: Stay Focused on Your Long-Term Goals

While it’s impossible to predict the next twist in global trade or market sentiment, what remains clear is this: reacting to volatility with panic can do more harm than good. The wisest course of action? Stick to your plan, diversify your investments, and focus on your retirement horizon.

Need support with your pension strategy?

Contact F J Hanly & Associates today for personalised advice tailored to your long-term financial goals. Let’s help you build a pension plan designed to weather the ups and downs—so you can enjoy peace of mind, no matter what the markets do next.