Plant a tree, steady streams into a river and set sail……

Inflation is like a slow leak in a tyre. You might not notice it at first, but over time, that leak can leave your tyre flat, making it much harder to reach your destination. In the same way, inflation quietly eats away at the value of your money. What you can buy today for €10 might cost €15 or more in 20 years. This means that if your money is just sitting still in a savings account or under the mattress, it's losing its power to keep up with rising costs.

Now, imagine your pension as a ship setting sail for retirement island. If you don't equip it with strong sails and a reliable engine (i.e. a well-thought-out investment strategy), inflation is like a strong headwind that will slow your journey and might even push you backward. On the other hand, with the right investment strategy, your pension can act like a motorboat, steadily powering forward despite the headwinds of inflation.

Investing in assets like stocks, bonds, or property gives your pension the chance to grow faster than inflation. Stocks, for instance, are like planting a tree—it starts small, but over time it grows, produces fruit, and can even grow new branches. While there are occasional storms (market ups and downs), trees generally grow taller over decades. Similarly, investing in stocks can provide your pension with the growth it needs to not only keep pace with inflation but also surpass it.

Bonds are like steady streams that flow into a larger river. They might not grow as quickly as trees, but they’re reliable and can provide balance when the stock market gets stormy. Property investments can be thought of as building houses that not only increase in value over time but also provide rental income (just like rent from tenants can provide cash flow).

Without a suitable investment strategy, your pension could fall short of covering your future needs. Imagine arriving at retirement island only to find out that the cost of living there has doubled, and your ship doesn’t have enough supplies. That’s what happens if your pension isn’t prepared to battle inflation.

By working with a financial advisor and choosing the right mix of investments, you can ensure that your pension grows strong and steady, ready to handle the inflation headwinds and secure your future.

Don’t Just Watch the Dips – Look at the Journey

Every so often, my phone rings more than usual and it’s nearly always when markets are falling. That’s perfectly understandable. When you hear the headlines warning about plunging stock markets or see your pension value dip, it’s natural to feel worried. But here's the thing: these short-term drops often make a lot more noise than the long-term growth.

Most years, the value of mainstream investments, especially higher-risk growth funds, actually goes up. Yet we rarely talk about the steady gains. It’s the sudden drops that make headlines, even if they’re often temporary. Take the S&P 500, one of the world’s most-watched stock indexes. It saw sharp declines in recent times — but most of those losses have already been recovered. In fact, even in the middle of the so-called crisis, the fund was still up over the 12-month period.

That’s the nature of investing: it’s a journey, not a straight line. And my job as a financial advisor is to help people stay focused on that journey.

The investments I use are mostly with mainstream pension and investment providers—strong, regulated institutions with long-term track records. Some of my clients use a specialised investment platform like Conexim, which gives us access to more niche options, but for most, it’s about steady, diversified strategies, not chasing the next big thing.

It’s important to remember that no one can predict the future, not me, not the experts on TV, and not the markets themselves. That’s why risk is part of every investment, including the one most people don’t think about: cash. Even bank deposits can lose value in real terms if inflation outpaces interest.

The key is to match your investments with your goals, your time horizon, and your comfort with ups and downs. Reacting to every drop can do more harm than good because the worst days are often followed by some of the best. So, the next time markets get shaky, and the headlines go into overdrive, take a breath. Look at the bigger picture. Your investments are like a long hike: there’ll be hills and valleys, but with the right preparation and guidance, you’ll keep moving in the right direction.

Market Update

US markets have officially entered a bear market, with only 1932 representing a worse start to the year for the key S&P 500 market gauge. A 50/50 portfolio of global equities and global bonds look set for their worst quarter in history.

However, it is worth noting that the above tells us that we are at extremes and hindsight will tell us that a move to cash in early January would have represented a salient New Year’s Resolution so far this year. Last Monday every constituent of the S&P 500 was in negative territory at some point (first time since 1996), and the wider New York Stock Exchange advance/decline ratio was the most negative since 2007. The moves over the weekend in riskier ‘assets’ such as Bitcoin (-70% from record high) also suggest sentiment is now negative in the extreme.

What does history tell us at this juncture?

Firstly, do we know when equities will start to rise significantly again? No, we don’t. But there are some things we do know. We know that there is technical overselling. We know that negative sentiment is extreme (Bull/Bear Spread). And we know that valuations are now below ten-year averages (Global P/Es). We also know that if you had stuck with stocks after the first 25% fall in 1970, 1974, 2001, and 2008 you would have been back in positive territory in between two and five years.

This is all very easy to note ‘ex-post’, and the price of admission to this point has been double digit declines across multi-asset funds so far this year. But the declines experienced by some investors in certain risk assets (single ‘meme’ stocks, cryptocurrencies) do not in general represent the returns experienced by those who engage with a financial advisor.

Markets may have ‘changed’ in the short term, but if a person’s circumstances haven’t it is highly probable that the plan, fund choice etc, at the start of the year continues to be the right one. It is also known that even in a world of rising interest rates; real returns are still negative – and are lower than they were at the start of the year. Inflation is decimating the purchasing power of money held on deposit more than any time this century. This is a crucial point for investors looking to save for the longer term. Whether for pension, child’s education, or a rainy-day fund.

Equity markets are under pressure, inflation remains hot, and interest rate policy continues to heat up. However, in scenarios such as this, those with cool, calm heads will prevail. This can be achieved by people engaging with their advisor, sticking with their financial plan, and recognising that the price volatility experienced whilst investing is the admission price for long term investment returns.