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Much has happened in the investment space over this past year. An AI-driven market surge, bond markets coming down, companies holding steady, opportunities with precious metals, low interest rates, unemployment peaking, to name a few.
The below graphs illustrate the strong upward trend in global equity indexes since early 2023, led by U.S. and Japanese markets, alongside a gradual rise in 10-year bond yields from historic lows, signaling a shift in interest rate dynamics across major economies.
Closer to home, the New Zealand economy is showing green shoots of recovery, supported by improving consumer confidence and easing financial conditions. In the U.S., markets the Federal Reserve cut interest rates by another 0.25% recently, putting it in the range of 3.50% to 3.75%, as it continues its cautious stance, even as inflation remains elevated (circa 3%) but well below the peaks of recent years. While unemployment has ticked higher globally, it appears to be stabilising, reducing fears of a sharp labor market downturn. Market volatility has also subsided, with the VIX now comfortably below 20, reflecting a more steady risk environment. Currency pressures have also eased; the NZD, which faced headwinds earlier in the year, has begun to recover slightly as expectations for lower interest rates gain traction.
As 2025 draws to a close, markets have demonstrated resilience amid shifting economic conditions, moderating inflation, and easing volatility. While challenges remain, the year has underscored the importance of staying disciplined and diversified.
End of year tips
While we approach a time of rest and recovery (and Christmas shopping), we’d like to provide some tips to keep in mind to ensure you start 2026 on a great note.
Beware of scams: The holiday season and year-end period often see a spike in fraudulent activity as scammers take advantage of busy schedules and financial transactions. Common tactics include phishing emails, fake investment opportunities, and impersonation scams. Check out the FMA’s Warnings and Alerts page for a non-exhaustive list of the current scams that you should be aware of.
Think about your goals: Take a moment to review your short-, medium-, and long-term goals. Whether it’s building an emergency fund, saving for a major purchase, or planning for retirement, make sure to write your goals down to make them tangible. Ask yourself if your current strategy aligns with these objectives. Remember, you don’t have to do this alone; we’re here to help.
Budget for next year: You should already have a clear picture of your income, potential bonuses, and any salary adjustments, so consider how these align with your expenses (fixed and discretionary). Factor in travel plans, major purchases, and other big-ticket items, then ask yourself: Will I have a surplus? If so, decide how to put it to work (e.g. investing, paying down debt, boosting savings etc.).
Take advantage of compound interest: The earlier you start and the longer you stay invested, the greater the impact. Even small contributions can grow significantly when left to compound. If you’re holding cash or planning for short-term goals, consider options that maximise your returns. We can recommend high-yield savings options that beat what you can get in the banks .
Make the most of your KiwiSaver: KiwiSaver remains one of the most effective ways to build long-term wealth. It’s pleasing to see the government initiative to increase KiwiSaver contributions from 3% to 4%. We believe that politicians should be working towards increasing these contributions to match with Australia so we can grow our savings pools, to have a more secure retirement. If you can afford more than 3% contributions to your KiwiSaver, you should consider investing at a higher rate to boost your savings. If you’re unsure what approach is best for you, talk to us and we’d be happy to help.
Enjoy life today: If you’ve been procrastinating on experiences or plans, consider doing them now as tomorrow isn’t guaranteed. At the same time, if worries about your financial future are holding you back, let us help. We can work with you to create a financial plan that gives you peace of mind, so you can enjoy today knowing your future is secure.
Office shutdown and staff update
Trilogy’s last day of business for the year will be Friday, 19 December 2025, and we will be back on Monday, 5 January 2026.
For any urgent enquiries during this period, please contact us at info@trilogyfs.co.nz. We will respond as soon as possible.
Planning any transactions before the holidays? Let us know by December 16th so we can organise this for you.
Our team will be taking time off for some well-deserved rest and relaxation.
Please read on to find out what our staff will be up to during the holiday break.
Chiti
Thank you for your support in 2025! As the festive season approaches, I’d like to extend my warmest wishes for a joyful Christmas and a prosperous New Year. We truly appreciate your trust and partnership throughout a year that brought strong opportunities across global markets, despite some volatility. Highlights included resilient infrastructure assets, renewed strength in emerging markets, and a solid European rebound, underscoring the value of diversification and discipline. On a personal note, I’m excited to spend the summer fulfilling a long-held dream: exploring Africa’s wildlife on a safari, a perfect way to recharge for the year ahead.
We look forward to continuing to support our clients’ goals with care and commitment in 2026. Wishing you a wonderful holiday season!
Steve
My oldest daughter, Pippa, is home from Bristol for Christmas, so it’ll be wonderful to have all three of my daughters together in Auckland on Christmas Day. With three strong, confident personalities around the table, the day is always lively — and I may well need a recovery break afterwards. So Roz and I will head up to our family bach in the Far North, where I’ll be continuing my training for the Motatapu marathon in Central Otago next March.
Adrian
Adrian will be enjoying both playing and coaching cricket over the holidays and enjoying a family trip to Melbourne for the New Year. He’ll be representing Auckland Over 50s in a 4-day tournament and coaching at the Cornwall Cricket Club, where Trilogy Financial Solutions supports the cricket programme.
Andrew
Andrew will be having an eventful end-of-year break, starting with his wedding just this past weekend in Whitford. This will be followed by Christmas with family in Auckland. Andrew and his wife, Robyn, will spend New Year’s in the Cook Islands for their honeymoon.
Jerome
Jerome and his family will be enjoying the holiday break in Auckland. He’s looking forward to taking his 1-year-old daughter to some beaches and playgrounds. He’s also planning to spend time on the tennis courts and make the most of the summer weather.
Waruni
Waruni and her husband, Nuwan, are planning an exciting trip to explore parts of the North Island they haven’t visited before, including visiting Hobbiton for the first time. They’re looking forward to spending time hiking and enjoying nature. They hope to relax, have fun, and create lasting memories together.
Thank you
Thanks for sticking with us throughout 2025! We truly appreciate your trust and support. We wish you and your family a joyful festive season, and we look forward to working with you, refreshed and ready for an amazing 2026.
If there is anything urgent during the holiday period, please contact us at info@trilogyfs.co.nz. We will respond as soon as possible.
Kind regards,
Trilogy Team
Markets have performed strongly over the last three years, which can make it feel like valuations are very high. It's natural to wonder if something will happen or if this is a bubble. While some indicators suggest the market is expensive, this does not guarantee a crash. Market highs are often followed by correction periods but also reflect optimism about future growth.
Investors should understand that bubbles form when prices far exceed realistic values based on earnings or cash flow expectations. Currently, though risks exist, many companies maintain strong fundamentals, and some experts believe the current market environment reflects a new normal rather than an imminent collapse.
The best approach is to stay focused on long-term investing principles like compounding returns, diversification, and managing volatility through disciplined strategies. While cautious awareness is wise, reacting emotionally to market highs risks undermining long-term goals. Seeking professional advice can help tailor strategies to your needs and reduce anxiety about market fluctuations.
Get in touch today; our team is always happy to help.
Bridging Retirement Costs and Income
The Massey Retirement Expenditures Report 2025 shows retirees in New Zealand spend more than the New Zealand Superannuation they receive. For a single person living modestly in metro areas, the weekly shortfall is about $167. Couples living comfortably in cities may need to top up nearly $952 a week beyond NZ Super. Rising costs for essentials like food, energy, and rates are pushing these expenses up even faster than inflation.
The report highlights how much is required to maintain different retirement lifestyles. It estimates retirees will need between around $181,000 and $1 million in savings, depending on whether they live modestly or comfortably and on household size. Future retirees face challenges, as fewer younger New Zealanders own homes, which adds housing costs like rates or rent to the retirement budget.
For example, if you have accumulated $600,000 at the time you stop work (retirement), and if you have this money invested in a middle-risk/balanced format, you can draw down about $30,000 annually for 30 years after tax and fees (about $576 per week). Refer to the graph above.
The retirement report serves as a crucial guide for planning a financially secure retirement in New Zealand, reflecting real costs and lifestyle choices retirees face today.
Central Banks Ease to Boost Growth
The Reserve Bank of New Zealand (RBNZ) recently cut its official cash rate (OCR) by 50 basis points to 2.5%, the lowest level since mid-2022. This decision reflected concerns about weak and uneven economic growth and the ongoing challenge of anchoring inflation near its 2% target midpoint, which currently stands slightly above at 2.7%. The Monetary Policy Committee made this move to stimulate consumption and investment, signalling its readiness to support the economy amid uncertain conditions. Market expectations suggest further rate cuts could follow, potentially pushing the OCR down to around 2.25% in the near term to further anchor inflation and support economic recovery.
Similarly, the US Federal Reserve has also eased its key interest rates recently. In October 2025, the Fed lowered its benchmark federal funds rate by 25 basis points to a range of 3.75% to 4.00%, marking the second cut this year and bringing rates to their lowest level since 2022. This move was motivated by signs of a slowing labour market and concerns about downside risks to employment, even as inflation remains somewhat elevated above the Fed’s 2% target. The Fed has also indicated that further rate cuts may be forthcoming, though the timing remains data-dependent amid uncertainty caused by a prolonged government shutdown limiting access to economic data. Both central banks’ actions underscore a global trend of monetary easing aimed at boosting growth and stabilising inflation in the face of persistent economic challenges.
Rare Earths Market Surge
The global rare earth stocks have surged significantly in 2025, driven by heightened demand for critical minerals essential to electric vehicles, renewable energy, and defence technologies. Key market players like MP Materials, Lynas Rare Earths, and several newer U.S. companies have experienced remarkable stock gains as governments accelerate efforts to secure domestic supply chains and reduce dependency on China's dominant refining capacity. This surge is also fueled by geopolitical tensions and policies aimed at diversifying supply sources.
Despite the impressive growth, the sector remains volatile and capital intensive, with substantial risks tied to project execution, environmental scrutiny, and political dynamics, especially China's ability to influence global markets through export controls. Investors are advised to approach the sector cautiously, emphasising diversification and focusing on companies with solid production and offtake agreements to mitigate these risks.
Looking ahead, the rare earth market is viewed as entering a multi-year supercycle fuelled by the accelerating transition to clean energy and advanced technologies reliant on these materials. While some volatility and speculative surges are expected, the overall outlook is positive for firms that can successfully scale production and navigate geopolitical challenges. This positioning makes rare earth stocks a compelling but complex opportunity as global industrial strategies prioritise securing critical mineral supplies.
Market Update
New Zealand
NZX 50 around 13,600, a slight weekly gain after an early dip.
Utilities and healthcare led gains; real estate and industrial sectors lagged.
RBNZ cut the official cash rate to 2.5%, signalling more easing possible.
Mixed corporate earnings; ANZ profits down but outlook positive.
Global uncertainties, including the US shutdown and China trade data, influence sentiment.
USA
The Fed cut rates to 3.75%-4.00% to support slowing growth and inflation control.
The ongoing US government shutdown causes economic data delays.
US markets mixed amid cautious investor sentiment.
Future rate moves are data-dependent, with watchfulness on Fed communications.
Asia
Asian markets rebounded after the US shutdown deal; South Korea and Japan led gains.
Tech and semiconductor stocks drove positive moves.
China’s mixed macro data caused some sector sell-offs.
Broad optimism as geopolitical and policy risks eased.
Europe
Markets fluctuated amid inflation concerns and growth uncertainties.
Technology and industrial sectors showed resilience.
The Euro softened amid ECB policy watch and geopolitical factors.
Corporate earnings and easing inflation provided some support
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
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