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.

Market positivity despite 2025 turbulence

Markets are near all-time highs despite tariffs, bombings, and the ongoing geopolitical turbulence. The latest round of tariffs from President Trump—targeting imports from over a dozen countries with rates as high as 40%—has so far been met with a muted response from both Asia-Pacific and European equities, with indices like Japan’s Nikkei 225 and South Korea’s Kospi even posting modest gains this week.

This resilience comes despite heightened volatility earlier in the year, when sweeping tariff announcements and reciprocal measures triggered a sharp sell-off and a spike in the VIX index (which measures the volatility of the futures market) to levels not seen since the pandemic. Markets rebounded after a temporary pause and softening of tariff stances, suggesting that investors remain focused on longer-term fundamentals and the potential for quick policy reversals.

At the same time, global events—like unrest in the Middle East and the ongoing war in Ukraine—are still creating uncertainty, especially when it comes to oil prices, which tend to react quickly to headlines. That said, the overall mood has shifted. While investors are still being careful, there’s a bit more optimism in the air than there was a few months ago.

We believe 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.

OCR Update and what’s next

OCR Update from Adrian

Check out the video below for Adrian’s take on the latest OCR update and what he expects going forward.

With interest rates remaining unchanged, let us know if you'd like any guidance on where to invest your short-term money. We can help you achieve returns of around 3.0% per annum on-call (with daily compounding) and up to 4.25% when investing for 12 months.

These on-call and term deposit options are Portfolio Investment Entity (PIE) products, and tax is capped at 28%. The top tax earners will save up to 11% on tax payments.

If you’re interested in learning more, get in touch by sending an email to info@trilogyfs.co.nz or calling us on 09 553 8928.

The trade war continues

President Trump has ramped up the trade war again, sending out a fresh round of letters to leaders in over 20 countries. He’s warning that steep new tariffs—between 20% and 40%—will kick in on August 1 unless new trade deals are made. This latest move targets countries like Japan, South Korea, the Philippines, Iraq, Algeria, and several others across Asia, Africa, and Eastern Europe.

What this means for you

The ripple effects of these tariffs will impact global trade flows, investor sentiment, and export-driven sectors. This kind of volatility tends to shake markets in the short term, but your diversified portfolios are better positioned to ride out the bumps.

As previously mentioned, the Reserve Bank of New Zealand is keeping a close eye on inflation and may lower interest rates if pressures continue to ease, which could support asset prices but also reduce returns on term deposits.

For now, the best approach is to stay focused on your investment goals, avoid reacting emotionally to headlines, and be assured that we have constructed your portfolio to best suit your situation.

Market update

United States

• Major indices are near record highs but showing volatility as investors react to President Trump’s new tariff announcements targeting more than a dozen countries, with rates up to 40% set for 1 August.

• The S&P 500 and Dow have seen minor declines over the past few days after recent highs, while the Nasdaq Composite reached a new record close, buoyed by tech sector strength.

• Market sentiment remains cautious, with modest gains in futures and an ongoing focus on trade policy uncertainty.

New Zealand

• The RBNZ held the OCR at 3.25% on 9 July. The central bank signalled only one more rate cut—likely to 3.00%—before the end of 2025, reflecting ongoing caution about inflation and economic outlook.

• The NZX50 index gained 1.6% over the past week and is up 7.5% year-to-date, despite a 0.8% drop on 3 July.

• The NZ dollar strengthened after a proposed Israel-Iran ceasefire and dovish signals from the US Federal Reserve, reflecting global risk-on sentiment and a weaker US dollar.

• Good news for parents with young children, as the FamilyBoost childcare rebate has been updated. The maximum rebate is now 40% (up from 25%) of weekly early childhood education fees, and the annual household income threshold for eligibility is now $229,000 (up from $180,000).

Australia

• The Reserve Bank of Australia (RBA) held the cash rate steady at 3.85% on 8 July, surprising markets that had widely expected a rate cut.

• The Australian share market (ASX 200) reached a new record high, gaining around 1% for the week, supported by strength in health, property, resources, and retail sectors. Investor optimism remains strong, with the ASX 200 on track for its 10th gain in 12 weeks, buoyed by expectations of future RBA rate cuts and positive leads from Wall Street.

Asia

• Key indices such as Japan’s Nikkei 225 and South Korea’s Kospi have posted modest gains despite being directly targeted by new US tariffs.

• Markets across Asia are digesting the potential impact of tariffs but have so far avoided sharp sell-offs, reflecting hopes for further negotiation before the 1 August deadline.

Europe

• European markets, including the Stoxx 600 index, also saw slight increases after the US tariff announcements.

• Investors are monitoring the situation closely, with European exporters potentially exposed to retaliatory measures and shifts in global trade flows.

  
  

Overall, global markets remain near all-time highs but are trading cautiously as the trade war intensifies and the 1st of August tariff deadline approaches.

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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 newsletter is accurate at time of writing.