There’s a lot going on in the world right now, so it’s easy to feel that the ground keeps shifting under our feet. The major currents that move global share prices also show up in our supplier invoices, our borrowing costs, and our customers’ spending power. Whether we’re weighing where to put some spare cash to work or simply trying to protect margins, it’s the same set of risks. Let’s look at where things stand and what to watch for in the coming months.
The market conditions affecting investment
The global economy is holding up better than many expected
Growth forecasts for this year remain reasonably solid, and despite many disruptions in the form of wars, tariffs, and energy prices, the world economy hasn’t tipped into the slowdown some predicted at the start of the year. Despite an active US-Iran conflict disrupting the Strait of Hormuz since February 2026, global growth forecasts have held up rather than collapsing.
Corporate earnings forecasts are being revised upwards
This is especially true for companies enabling the AI build-out: chipmakers, data centre operators, power infrastructure firms, and the software providers underpinning it all. Strong capital spending on AI is translating into real revenue and profit growth, not just share price hype. The S&P 500 benchmark index has appreciated by just over 10% so far this year and there has been a 38% jump in the Nasdaq-100 Technology Sector index in 2026.
The AI theme itself is broadening
What started as a standalone technology is now changing banking, healthcare, logistics, utilities, and more. That’s creating a widening gap between companies that are genuinely benefitting from AI integration and those for whom there is no clear connection between adoption and earnings growth. Just like during the dot-com boom, distinguishing the true enablers and adopters from the pretenders (simply sticking “AI” in the company name like people did with “.com” 30 years ago) has become an important skill for any investor.
The geopolitics driving commodity prices and inflation
Conflict in the Middle East and elsewhere continues to put upward pressure on oil prices, and that filters through to input costs, transport, and ultimately consumer prices. For a small business already managing tight margins, this is worth watching closely, even if you’re not directly exposed to energy markets. Oil-linked assets have already swung over 50% twice in 2026, so today’s Brent crude oil price ($76 at the time of writing) cannot be taken as the baseline for the next 12 months.
The influence of central banks
Central banks remain the swing factor, and policy is diverging across regions: some are closer to the end of their rate-cutting cycles, while others are holding steady or even facing pressure to tighten again if inflation proves stickier than hoped. The European Central Bank’s stance matters directly to Irish borrowing costs as well as the strength of the euro against sterling and the dollar. Remember, the ECB’s rate decisions feed directly into Irish tracker and variable mortgage rates; a quarter-point ECB move changes monthly repayments on Irish mortgages almost immediately.
Investment risks to bear in mind
War, oil prices, inflation, and rate hikes are tightly linked
A prolonged or escalating conflict could push oil prices higher for longer, reigniting inflation and forcing central banks to reconsider rate cuts, or even reverse course. That has knock-on effects for borrowing costs here in Ireland. When Arab OPEC members imposed an oil embargo during the Yom Kippur War in the 1970s, oil prices quadrupled within months, feeding a widespread stagflation in the West that took years to unwind.
AI spending itself carries risk
The scale of capital expenditure going into AI infrastructure is huge, and while it’s driving growth today, any sign that returns aren’t materialising as expected could result in a major reassessment of valuations across the sector. We saw this pattern during the Celtic Tiger, when developers borrowed massively to build housing that far outstripped immediate demand. When the 2008 crisis arrived and no one was buying, those companies went bankrupt, leaving us with around 3,000 ‘ghost estates’ that were never finished.
A momentum unwind among AI enablers is a real possibility
A small number of AI-related companies have driven most of the recent gains in the stock market. If investors lose confidence in these companies – even for reasons that have nothing to do with how well they are actually doing – their share prices could fall sharply and, because they make up such a large part of the market, that fall could drag the wider stock market down with them. In the 1990s, for example, just a small group of technology stocks drove most of the market’s gains. When confidence in them collapsed (around March 2000), the Nasdaq fell by around 78% over the following two years, dragging even the more diversified S&P 500 down with it.
Central banks can get it wrong
If central banks cut interest rates too early, prices could start rising quickly again. If they wait too long to cut, they could slow the economy down more than necessary. Either mistake affects how much it costs to borrow money, how strong the euro is, and how confident businesses feel about investing. In 2011, the ECB – mistakenly worried about the rise in headline inflation – raised interest rates twice despite the worsening eurozone debt crisis. Although they reversed these decisions within months, many economists view those 2011 hikes as a policy mistake that made the crisis much harder for countries like Ireland.
US debt levels remain a background concern
Rising government debt and deficit levels in the United States haven’t caused a crisis yet, but if investor confidence in US fiscal sustainability wavers, it could unsettle bond markets and ripple out into global borrowing costs, including here in Ireland. US national debt hit an all-time high of over $39 trillion in June 2026, with annual interest payments reaching a staggering $1 trillion.
What these risks and opportunities mean for your investments
The risks we’ve looked at – like the Iran conflict, questions over AI valuations, and concerns about US debt – matter most if your money is concentrated in the areas they affect. If you’re invested in a fund that tracks US equities or the Nasdaq, your returns are closely tied to the fortunes of a small number of large US tech companies. That has delivered strong returns so far, but it also means little protection if sentiment in that specific area turns.
This is where managed funds earn their keep, spreading your money across geographies, shares, bonds, property, and cash so no single shock can do too much damage on its own. Here’s how the higher-risk, higher-growth options compare across the three main Irish providers:
- Zurich: Prisma 5 or Prisma Max. Actively managed funds, meaning the fund managers shift money between shares, bonds, property, and cash as economic conditions change, rather than sticking to a fixed mix. Prisma 5 rises and falls by roughly the same amount as the stock market generally does. Prisma Max holds even more in shares, typically 85% – 95% of the fund.
- Irish Life: Multi Asset Portfolio (MAPs) Funds. The highest-risk, most equity-heavy fund in the MAPs range, MAP6, is also actively managed. It uses a system that automatically shifts money out of shares and into cash when markets are volatile, then back into shares once things settle, aiming to soften the worst of any drops.
- Standard Life: MyFolio Active V. The highest-risk fund in the actively managed MyFolio Active range (its sister range, MyFolio Market, simply tracks the market rather than responding to it). MyFolio Active also screens its investments for environmental, social, and governance (ESG) factors.
Zurich’s published figures show that Prisma Max has returned an average of 10.2% a year since it launched in 2013, and 11.5% a year over the past decade. Using the rule of 72, a 10% return means that a pension pot roughly doubles every seven years (don’t forget there will be an annual management fee in the region of 1%). For a business owner with 15 or 20 working years left, that’s the difference between a modest pension and a genuinely comfortable one.
What we’re talking about is a mid-to-long-term average, not something you can bank on every year. For example, Prisma Max fell 19.1% in 2022 but also jumped 28.1% in 2019. The average smooths out what was, in reality, a bumpy ride. How actively a fund is managed, what it holds beyond shares, and how spread out that is across sectors and geographies vary from provider to provider and even among funds aimed at the same risk level.
If sound financial management is a priority for your business, you might benefit from an outsourced accounting package from Beyond. We look after the day-to-day but also have an eye on your longer-term strategy and growth plans. Get in contact with us today to see how we could help.
Rory
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