Global markets at all time highs

Global stock markets are trading at all-time highs, prompting many investors to question whether this upward trend can continue or if a correction may be on the horizon. We have summarised below some of the key headwinds (risk factors) and tailwinds (supporting factors) to provide an overview of what could support further market gains, as well as the potential risks and challenges ahead.

• Monetary Policy

  • Headwinds: Sticky inflation limits interest rate cuts, high real yields hurt valuations, policy divergence adds volatility

  • Tailwinds: Rate cuts expected in some regions, central banks may ease if data weakens, lower long-term rates could help

• Macroeconomic Growth

  • Headwinds: Slowing global growth, weaker consumer/business spending, capex slowdown in demand-sensitive sectors

  • Tailwinds: Resilient tech/AI sectors, Emerging Markets (EM) growth (India, SE Asia), fiscal support in some economies

• Valuations

  • Headwinds: High valuations, esp. in US tech, narrow market leadership, risk of re-rating if growth disappoints

  • Tailwinds: Value sectors still attractive, broader market participation, structural growth themes (AI, clean energy)

• Geopolitics

  • Headwinds: Rising global tensions (Middle East, Ukraine, Taiwan), trade fragmentation & tariffs, policy uncertainty in US/EU

  • Tailwinds: Policy reforms could boost markets, trade de-escalation possible, infra & industrial policy support growth

In our view, the answer largely depends on each investor’s risk tolerance, risk capacity, investment timeframe, goals, and objectives. Our Goals-Based Investment approach is designed to help investors navigate these risks and challenges and make the most of the opportunities that arise.

Please contact us if you have any concerns about the markets or would like to discuss how these developments may affect your investment strategy.

Good news for Kiwi home buyers

The Reserve Bank’s unexpected jumbo cut of the Official Cash Rate to 2.50% signals a clear effort to boost confidence among property owners and first-time buyers alike. This larger-than-expected 50 basis point reduction aims to encourage spending and investment amid ongoing economic uncertainty, particularly as signs of a modest recovery in consumption emerge.

Mortgage lending rates in New Zealand have seen a welcome decline, providing relief to Kiwis with mortgages and those looking to buy a home. According to current data from leading lenders, one-year fixed rates range from about 4.49% to 5.09%, while three-year fixed rates generally sit between 4.85% and 5.49%.

Variable floating rates are also competitive, with some lenders quoting rates around 5.7% to 6.3%. These lower rates represent a significant drop from the higher levels seen in the past few years, creating opportunities for borrowers to refinance at better terms or enter the housing market with more affordable financing.

This easing in mortgage costs is positive news for Kiwis managing existing debts or aspiring to buy, as it reduces monthly repayments and enhances affordability in a market where housing costs remain a key concern. It also supports economic confidence by making borrowing less costly amid broader financial pressures.

For those looking to enter the property market or manage mortgage repayments, this move could mean lower borrowing costs and a stronger incentive to act, even though the economy still faces significant spare capacity and risks of cautious consumer behaviour.

If you’d like to speak with Adrian, our in-house mortgage specialist, feel free to get in touch, and he’d be happy to help, no matter which stage of the property journey you’re on.

Getting the most out of ChatGPT

Are you using generative Artificial Intelligence (AI) tools like ChatGPT to their full potential?

AI chatbots, such as ChatGPT, Google Gemini, Microsoft Copilot, Perplexity, Claude, and DeepSeek, are now highly integrated into our digitally dependent world and daily routines, and they serve many purposes, from helping to answer simple questions to generating images based on a prompt.

The above video from business.govt.nz covers some general tips and tricks to use ChatGPT more effectively.

Aside from these tips, here are a few more helpful ways to get the most out of AI chatbots:

• Create a Persona: Give the AI a persona, such as an HR manager or a teacher, and then give it a follow-up prompt to receive a response in a manner and style that match the persona.

• Format the output: You can ask AI to deliver any response in the format you like, such as in a bulleted list, a table, or code.

• Provide examples: You can provide AI examples of your own writing (e.g., an email, social media post, or article) and have it write in your style.

Keep in mind that any data you provide AI may not be private. It’s important to check the privacy policy for any AI chatbot that you use and to avoid inputting sensitive information if data privacy is a concern.

Market update

United States

• Major indices hit record highs fuelled by AI optimism and strong corporate earnings.

• The S&P 500 recently closed at a fresh record high (6,740.28 as of 7 October 2025), driven by gains in technology and artificial intelligence-related stocks, reflecting strong investor optimism despite ongoing macroeconomic uncertainties.

• A US government shutdown delayed key economic data but did not dampen investor sentiment.

• Small-cap stocks set records, supported by tech sector gains like AMD’s 23% rally on AI chip deals.

• Fed rate cut expectations increased due to signs of a cooling labour market.

  
  

New Zealand

• NZX 50 recently posted a 3%+ weekly gain, boosted by expectations of an OCR cut by the Reserve Bank.

• Labour market data showed fewer filled jobs year-over-year, signalling mixed economic conditions.

Australia

• The Australian market fell 0.3% to 8,953 on Tuesday (7 October 2025), extending losses due to weakness in banking and consumer sectors.

• Energy stocks fell due to a drop in oil prices after OPEC comments.

• Inflation data showed a sharper-than-expected rise, raising monetary policy concerns.

Europe

• European indices like the Stoxx 600 and FTSE 100 hit record highs in early October.

• Gains were broad, led by banks, tech, luxury goods, and healthcare sectors.

• Political risks emerged with the French PM’s resignation but did not derail markets.

Asia

• Japan’s ruling party elected Sanae Takaichi as leader, weighing on the yen with stimulus expectations.

• Hong Kong’s Hang Seng rallied nearly 4% on tech stock strength.

  China showed mixed economic signals with manufacturing gains but service sector weakness.

• Gold prices rose to multi-year highs (USD 4,059.05 per ounce as of October 2025, up 53% from the previous year) amid global uncertainty.

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If you would like to discuss your current portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions

Markets have bounced back with AI leading the charge

Now that we’ve reached September, we can see that stock markets have done well overall in 2025. This is despite the blip in April, caused by Donald Trump’s ‘Liberation Day’ tariffs.

This is also the first time in history where we have a U.S. president telling the Federal Reserve how interest rates should be behaving. This is likely to lead to an interest rate decrease, which is positive news for stock markets. This positive news is coupled with wariness around the potential bubble of the AI sector, which is sitting at particularly high valuations.

We recommend seeking advice to ensure your investments are not vulnerable to concentration risk, especially if you’re close to retirement or are already drawing an income from your portfolio.

Get in touch today, our team is always happy to help.

Is AI a bubble?

With Artificial Intelligence (AI) valuations climbing, many NZ investors and financial advisers are starting to ask whether we’re seeing the early signs of a bubble.

According to a recent article from The Verge, Sam Altman, the CEO of OpenAI, shared that he believes the artificial intelligence market is currently in a bubble.

We certainly see some similarities with the current AI-driven market performance and the dotcom bubble of the late 1990s: investor hype around game-changing technology, the rise of tech-heavy indexes, and gains concentrated around a handful of large-cap stocks.

One of these large-cap stocks includes Nvidia, which has surged in recent years due to the growth in demand of AI chips. Nvidia’s current market share is so significant that it accounts for a large part of various market indexes.

When one company is dominating, portfolios are increasingly vulnerable to concentration risk, which can lead to significant losses if a particular company, or market segment performs poorly.

While we do see elements of a bubble in the current market situation, we also believe that there are enough factors that could see AI continue to maintain relevance including the productivity benefits and AI being embedded into core business models.

Whether AI is a bubble or not, it’s important to get advice to ensure your portfolio is well-diversified. We are always happy to discuss your financial matters and any concerns you may have around your portfolio’s diversification.

Retirement: coming sooner than you think

Whether you’re a few years away, or it’s a distant future, retirement hits faster than you realise.

We recently came across a New Zealand Herald article that stated most New Zealanders are not prepared for retirement.

We help many clients put together successful retirement plans. There are a few key factors that help lead them to a financially comfortable and enjoyable retirement:

• Pre-retirement planning: It’s never too early or too late to plan for retirement. Having a plan helps to ensure your financial security after you’re finished working so that you can maintain your desired lifestyle and enjoy life.

• Planning early: Time is one of the key factors for building wealth. Giving yourself as much time as possible to grow your retirement nest egg makes it far more likely that you are able to fund your desired retirement lifestyle.

• Having a goal: Knowing what lifestyle you want in retirement is key to determining how much you actually need to save.

  • Did you know that with $1 million in retirement savings you can draw down $50,000 per year (net of tax and fees) for 30 years when invested in a middle-risk (balanced) portfolio?

Please reach out to our team for advice on putting together a plan to ensure you have an enjoyable retirement.

Market update

United States

• S&P 500, Dow, and Nasdaq reached new record highs in August, with S&P 500 up 1.9% for the month and 9.8% year-to-date.

• U.S. GDP was revised higher, but a surprise employment revision signals a softer labour market.

• Market expectations centr,te on a September Fed rate cut and strong earnings, even as trade headlines and tariffs remain volatile.

  
  

New Zealand

• NZ equities posted modest gains as the Reserve Bank held rates steady, taking a wait-and-see approach amid mixed global signals. Data suggests that the Official Cash Rate (OCR) will see a cut at the next OCR review in October.

• Investor sentiment is supported by stable domestic data but cautious given lagging global rate moves and regional trade uncertainty.

• Global fund manager Nikko Asset Management officially rebranded to Amova Asset Management on 1 September, 2025, reflecting a fresh global identity while maintaining its New Zealand presence and the GoalsGetter KiwiSaver platform.

Australia

• The ASX advanced in August, driven by strong resource stocks and solid GDP figures, while inflation remains above target, keeping further rate action in play.

• Wage growth and employment data outperformed expectations, supporting further equity strength.

Europe

• Eurozone equities, led by banks and cyclical sectors, posted their best two-month run since February; Stoxx 600 rose on strong earnings.

• French political tensions and fiscal worries tempered optimism; inflation is contained, and GDP growth now outpaces expectations.

• ECB signals caution, watching growth and fiscal policy developments closely.

Asia

• Japan’s TOPIX surged on improved GDP and robust manufacturing, contributing to broad Asia-Pacific gains.

• China equities rose on tech stimulus and the US-China trade truce, with export optimism supporting regional sentiment.

• Other Asian markets benefited from stronger chip sector news and stable macro data.

Team update

Adrian receiving a man of the match award from South African great, Barry Richards

Adrian represents NZ at Spirit of Cricket World XI

We wish the best of luck to our Mortgage Specialist, Adrian Dale, who is captaining a New Zealand Over 55’s cricket team in an upcoming quad series in Mildura, Australia, 17-23rd September. He will be competing against teams from Australia and the ‘Rest of the World’ over two weeks of intense cricket.

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Staff work anniversaries

Our support team members Jerome and Waruni have both recently celebrated their 1-year work anniversaries.

We congratulate and thank them for their ongoing efforts to provide you with excellent service.

If you would like to discuss your portfolio feel free to contact us.

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If you would like to discuss your current portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions

Strong markets despite latest tariffs

Global markets have shown impressive resilience lately, continuing to perform strongly despite the introduction of new tariffs on 1 August. While some share valuations are sitting at relatively high levels and the headlines have been dominated by trade issues—especially the 15% tariff now affecting our wine exports—these tensions aren’t causing too much concern for most Kiwi investors at this stage.

On the home front, August is Sorted Money Month, which makes it a great time to check in on your financial well-being. This year’s theme is emergency savings. We encourage all our clients to take a moment to review their emergency savings and make sure they’ve got a solid buffer in place—just in case life throws a curveball.

Read on for more information on all of this and more.

Remember, it’s important to stay the course and to get advice before making any important financial decisions. The team here at Trilogy Financial Solutions is always here to help.

August tariffs

Markets have been a bit unsettled lately, following the latest round of tariffs announced on 1 August. Investors are weighing up the potential for rising input costs and the knock-on effect this could have on company earnings. Major sharemarket indices—including the S&P 500, Dow Jones, and Nasdaq—all took a hit, with the S&P recording its worst week since May and the Dow its worst since April.

There was a small rebound earlier this week, but overall sentiment is still cautious. Investors are keeping a close eye on how things play out—especially around economic impacts and any shifts in monetary policy. Companies with significant exposure to overseas tariffs, particularly in manufacturing and agriculture, are feeling the pressure more than most.

Even with these short-term headwinds, it’s worth noting that some share valuations remain high—especially in tech and certain growth sectors. In this environment, the fund managers we work with are sticking to a disciplined approach. They’re focused on high-quality companies with strong earnings, solid balance sheets, and sustainable business models.

Their active investment style is designed to help navigate uncertainty and take advantage of opportunities when markets move. This careful approach helps manage risk and keeps your portfolio well-positioned as the global economy continues to shift.

New Zealand’s 15% tariff

The US has recently lifted tariffs on New Zealand exports to 15%, up from the previous 10%, putting pressure on sectors like wine and red meat. This change puts Kiwi exporters at a disadvantage compared to their Australian and UK counterparts, who are still facing just a 10% rate.

The wine industry is feeling it the most—America is our biggest export market for wine (approximately a third of our wine, according to New Zealand Wine Growers), and the new tariff adds roughly $1 per bottle. That’s expected to cost the industry around $112 million in extra duties each year. Beef exports are also under strain, competing with Australian meat entering the US at lower tariffs. While dairy, machinery, and equipment exports are less affected, they’re still exposed to the tougher tariff environment.

For local investors, the direct impact is mainly limited to those with significant holdings in companies that rely heavily on affected exports—particularly listed firms in wine, red meat, and food processing. While the headline impact is meaningful for these sectors, many of the larger exporters are already diversifying into other markets or passing some of the extra costs on to US buyers, which helps soften the blow.

Smaller businesses may find it harder to adapt, but overall, this isn’t expected to cause major disruption to the broader New Zealand economy or sharemarket.

August “Money Month”

Money Month is here, bringing a timely focus on financial well-being for all New Zealanders. This August, the nationwide initiative is shining a spotlight on the value of emergency savings with its theme, “The difference is an emergency fund.” It’s a practical reminder for us all to review our financial safety nets—whether it’s starting your first emergency fund or strengthening what you already have.

Our rule of thumb is to have enough emergency savings to cover at least three months of your living costs. This gives you a solid buffer if something unexpected crops up, like losing your job, a health issue, or a big repair bill.

Having that cushion means you’re less likely to rely on high-interest debt or feel financial pressure during tough times. It also gives you the breathing room to deal with life’s curveballs without throwing your long-term plans off track.

We believe emergency funds should be kept in a safe place, with the flexibility to access it quickly, and at low cost.

We can recommend a great product for clients that want to keep their short-term money. It features no minimum monthly deposits and is taxed at your Prescribed Investor Rate (PIR), which is a maximum of 28%.

The current rates are as below (subject to change):

• On call (daily compounding): 3.00% per annum

• 3-month term: 4.00% per annum

• 6-month term: 4.25% per annum

• 9-month term: 4.25% per annum

• 12-month term: 4.25% per annum

Feel free to get in touch if you’re interested in learning more.

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If you would like to discuss your investment portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions

Disclaimer: The information in this investment update is accurate at time of writing.This investment update is for informational purposes only and should not be treated as financial advice. To the extent permitted by law, Trilogy Financial Solutions does not accept any responsibility or liability arising from the use of this information.