Equity markets have had a strong run since the lows of April, as shown in the graph below. In local currency terms, global equities (developed and emerging markets combined) are up 16%. For euro-based investors, the weaker US dollar means this translates into a gain of just under 5%.
The S&P 500 in US dollar terms is up 35% from the 8th of April 2025, so it’s easy to understand a recent comment describing the market as as being “priced for perfection in a very imperfect world.”
Our key word when speaking with clients at the moment is patience. Yes — stick to the long-term investment plan. But, patience means not feeling the need to buy more equities right now if the current allocation to equities is already close to target.
We’re also encouraging investors to review their overall US dollar exposure and consider reducing it if it has become too high. As always, it’s about knowing what you own, understanding the risks and making decisions consciously. Even deciding to make no changes is, after all, a decision.
Source: Data – MSCI, Graphic – Acuvest
September and YTD Numbers
A Step Toward Stability in the Middle East
While still in the balance, the world looks on in hope that the “Gaza deal” will deliver an end to hostilities and establish an internationally supervised transition for Gaza’s governance and reconstruction.
Budget 2026
Against a backdrop of global volatility, Budget 2026 took a cautious, long-term approach — avoiding short-term giveaways and focusing instead on a message of sustainable spending.
A total package of €9.4 billion, comprising €8.1 billion in public spending and €1.3 billion in taxation measures.
Ireland’s economy is projected to grow by 3.3% in 2025 and 2.3% in 2026, based on the Modified Domestic Demand measure.
Amid global uncertainties and volatile corporation tax receipts, the Government has adopted a more cautious fiscal stance, prioritising the buildup of reserves through the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, which are expected to reach €24 billion by end-2026.
A non-indexation of income tax bands effectively results in a modest increase in income tax.
The increase in Entrepreneurial Relief from €1 million to €1.5 million is welcome, though further expansion would better support business growth.
While taxation on funds and ETFs remains complex, a small first step toward simplification was made with the reduction of the exit tax rate from 41% to 38%.
Inflation Ticking Up in the US as a Result of Tariffs
The market is beginning to see the impact of tariffs in inflation numbers for the US (dark blue line).
Tariffs are increasingly feeding through to U.S. consumer prices as companies pass on higher import costs. After initially absorbing these costs, there is increasing evidence that retailers are now raising prices across a broad range of goods — from clothing and furniture to car parts and canned foods. While overall inflation remains moderate – but still above the 2% target – goods inflation is accelerating, and economists expect consumers’ share of the tariff burden to rise in the months ahead.
This presents a significant challenge for the Federal Reserve, which cut interest rates by 0.25% in September to a range of 4.0%–4.25%. Although the U.S. administration is pushing for further rate cuts, rising inflation pressures may constrain the Fed’s ability to ease policy further.
Gold goes over $4,000
As many of our clients know, gold has been one of the best-performing investments this year, recently surpassing $4,000 per troy ounce — an increase of over 50% YTD.
Source: tradingeconomics
The strong performance of gold reflects several key dynamics:
- Central banks have been steadily increasing their gold holdings to reduce reliance on U.S. Treasuries.
- Investors are turning to gold as a safe-haven asset amid concerns over inflation, rising government debt, and political uncertainty.
- Robust inflows into gold-backed ETFs have further added momentum to the upward movement.
Gold continues to play an important role in client portfolios as a long-term store of value.
Keeping an Eye on the Horizon – Tokenisation and DeFi
Part of what interests us about markets is how they evolve — and what that means for investors. One area attracting increasing attention is tokenisation and decentralised finance (DeFi).
Tokenisation uses blockchain technology to create digital versions of real assets like shares, bonds, funds, property and private equity. DeFi builds on this by enabling investors to transact and access financial services directly on digital platforms, often without traditional intermediaries.
For investors, this could eventually mean broader access to new asset types, lower costs, faster settlement, and greater transparency — all of which could enhance diversification and efficiency in portfolios.
In essence, tokenisation and DeFi point to a future where investing becomes more digital, open, and interconnected. It’s an area we continue to watch closely for the new opportunities it may bring to our clients.
So – What Should Investors Do?
Staying Steady in a Shifting World
Markets are dealing with a complex mix of political unpredictability, shifting rate expectations, and global economic pressures. These forces can create short-term noise—but for long-term investors, the best course is often to turn down the volume.
Here’s our advice:
1. Stay Invested and Avoid Knee-Jerk Reactions
Market volatility can be uncomfortable, but reacting emotionally often does more harm than good. History shows that staying invested through the ups and downs is a far more effective strategy than trying to time the market.
2. Stick to Your Plan
A well-structured, diversified investment strategy is built to weather uncertainty. If your goals haven’t changed, your plan probably shouldn’t either.
3. Be Opportunistic, Not Fearful
Downturns can offer buying opportunities—particularly for long-term investors adding gradually to equities or risk assets. Sometimes the best opportunities come when markets feel the most unsettled.
The Bottom Line:
Working closely with your advisor and staying committed to a well-structured plan will help you weather market shifts and capture future opportunities.
Let me leave you with two thoughts to keep in mind amid the noise. The second isn’t mine — it’s from Howard Marks of Oaktree Capital, and it stuck with me:
- “Volatility is inevitable — how you respond is what matters most.”
- “Risk avoidance ends up becoming return avoidance.”
Perspective, discipline, and a long-term mindset matter more than any single headline. Stay focused on the plan — and the opportunities it can help unlock.
John Tuohy is Chief Executive of Acuvest, an Irish-owned, independent advisory firm specialising in wealth management, pensions, and investment advisory services for individuals, companies, pension schemes, charities, and institutions. John is a Chartered Financial Analyst (CFA) and a Fellow of the Chartered Association of Certified Accountants.
