Question of the month: should I change my pension investment strategy?

My pension has had a very strong couple of years, and I've stayed in high-risk investments through the dips in April this year and last. Having recently had my 50th birthday I'm starting to wonder if I should de-risk. Should I change my investment strategy?

– MQ, Co Cork

It’s natural after a good run in markets to wonder how long your luck can last.

In fact there are solid reasons investment markets have delivered good returns in 2026: strongly rising earnings, and a global economy which has proven resilient to rising energy costs.

There’s no doubt some clouds are gathering - aren’t there always?  Right now, investors worry that the spend on AI has been huge, and demands for returns are rising; that inflation is gathering pace; and that geopolitical turbulence shows no sign of calming down, for example.

So while the general advice to hold your nerve and give your investments time is valid, it certainly true that there are times when you should consider changing your pension investment approach. Here are six of them.

1. Your timescale changes

How long you are able to stay invested is a key part of the decision to change investment strategy.

To take an easy example: if you need to lay your hands on your money in three months’ time, and will have a problem if it’s slipped by 5%, you should be in very stable assets.

On the flipside, if you’ve decided to defer a house purchase for five years, you should probably contemplate putting the money you’ve saved to work in the investment markets.

Of course, time moves on: for most of us, our investment timescale changes by definition. So if you’re planning to draw down your pension in the near-term, think carefully about dialling down its risk profile.

2. Your fund manager loses their way

Fund managers won’t always get it right – but it’s reasonable to expect that they invest according to a stated approach. There are times when that can go way off track and investors understandably question the manager’s ability to deliver the desired returns without excessive risk.

One example in the UK from the start of the decade is the major exposure European Opportunities Trust had to fraudulent German fintech company Wirecard (here’s one account).

If your fund fails to perform to its strategy over a sustained period, it’s could well be time to cut your losses.

3. Your appetite for risk changes

Investing your money is supposed to help you sleep better at night – not keep you awake. The fact that your money is working for you should be a good feeling. If that’s changed and your investment exposure is stressing you out, it might be time to change down a gear.

Of course the opposite is also true: your money could be invested in low-risk, low-growth vehicles even though you could readily stomach more risk. The need to change here is heightened now that inflation is rising.

In these cases, a behavioural change might be better – for example, if you are still years away from drawing your pension, checking your fund’s performance less regularly.

4. Your financial resilience changes

Your financial capacity to absorb short-term losses is a critical element in deciding the kind of investments you should hold. If you have a defined benefit pension along side this pension, low living costs, and own your home, it might be very sensible to invest in high-risk, alpha-oriented portfolio.

If your income is precarious, you’re retiring soon and your costs are rising, your investment choices should be very different.

5. This was never the right fund for you

Thousands of people in Ireland invest their savings and pensions in funds that simply aren’t right for their requirements in the first place.

If your money is invested in, say, 100% cash, or cryptocurrency, or property, or gold, it’s likely you are in this category. Yes, you might receive strong relative short-term performance in any one of these. But your risk is concentrated and your money has limited opportunities to grow.

It’s definitely worth reviewing, and likely taking action.

6. You just don’t need to take the risk any more.

Lastly, remember that an investment return is the payment we receive for bearing financial risk. But if you don’t need the return, why run the risk? If you’re financially well-off, or you have a pension which is nudging the €2.2 million lifetime cap, you may decide it’s just not worth it, and to remain in cash and cash-like instruments.

Make a change for the right reasons

Changing your investment strategy isn’t wrong. But there are good reasons and bad reasons for doing it. For many people, staying in the market, and staying the course during short-term volatility is the right approach. So if you’re considering whether to make a change, be sure it’s for the right reasons.