What global conflict means for your investments

6 hours ago
5 min read

Periods of geopolitical tension often spark sharp swings in markets, and the latest conflict is no exception. Oil prices have surged; investors are rotating into energy, precious metals (e.g., gold), and currencies (like the US dollar); and short-term volatility has returned as headlines dominate sentiment.

While these moments can feel unsettling, history reminds us that markets have navigated similar shocks before, from the early days of Covid to the Russia–Ukraine war. As former U.S. Secretary of Defense Donald Rumsfeld famously described, every crisis brings a mix of known‑knowns, known-unknowns, and unknown‑unknowns. The biggest risk is the unknown-unknowns, and we use this in risk management and strategic planning to highlight the dangers of overconfidence and hidden threats.

The chart below shows that the U.S. S&P 500 has continued to grow over the long term, even when faced with a number of negative world events.

During a time of crisis, some sectors inevitably rise, including oil and gas, defence contractors, ammunition suppliers, and certain specialised chipmakers. These are not typically areas where many New Zealand investors have strong exposure, often due to ethical exclusions or manager preferences.

In periods of heightened geopolitical tension and market volatility, diversification remains one of the most effective tools for managing risk. A well‑constructed portfolio spreads investments across different asset classes, countries, regions, industries and investment managers, which helps reduce the impact of any single event or sector.

It is also important not to get caught up in the day‑to‑day noise. Reacting emotionally or checking your portfolio too often can lead to decisions that undermine long‑term outcomes. As Warren Buffett famously reminds investors, staying patient and allowing markets to do what they do over time is often the most powerful strategy.

If you have any queries or concerns about how your investments are faring in the current markets or your financial, investment, lending, or retirement planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

Sincerely,

The Team at Trilogy Financial Solutions

The geopolitical situation

Geopolitical developments remain a significant driver of market sentiment, and the recent shift in Iran’s leadership has drawn global attention.

The transition has created a period of uncertainty as observers assess how the new administration may influence regional dynamics, foreign policy, and Iran’s approach to international negotiations. Changes of this nature often prompt markets to reassess potential risks around energy supply, trade routes, and broader Middle Eastern stability.

While it will take time for a clearer policy direction to emerge, the initial phase of any leadership transition tends to bring heightened market sensitivity.

At the same time, the United States has moved to increase certain tariffs from 10 to 15 per cent. This reflects an assertive stance in trade policy that can have ripple effects across global supply chains. Adjustments of this scale may influence sectors ranging from technology to manufacturing, adding another layer of complexity to the geopolitical landscape.

In environments like this, goals‑based investing becomes even more important. Maintaining focus on long‑term objectives helps prevent reactive decision‑making in the face of short‑term noise. The managers we work with are closely monitoring how these geopolitical shifts unfold. They are making active, measured decisions to rebalance portfolios where appropriate, ensuring that risk levels remain aligned with client goals. This disciplined approach allows portfolios to adapt to changing conditions while staying grounded in long‑term strategy rather than short‑term uncertainty.

KiwiSaver changes

KiwiSaver is entering a period of change, with both contribution settings and withdrawal options being updated. The default employee and employer contribution rates will rise to 3.5 per cent, and a new First Farm Withdrawal will be introduced to support eligible members looking to purchase their first farm.

A quick summary of the key changes:

Default employee contributions will increase from 3 per cent to 3.5 per cent.
Default employer contributions will also increase from 3 per cent to 3.5 per cent.
The new default rates will apply from 1 April 2026.
First‑time farm buyers will be able to use their KiwiSaver savings to purchase a farm through a company or trust that they majority own.
Workers in service tenancies, including farm workers, rural teachers, rural police and defence personnel, will now be able to use their KiwiSaver savings for a first home purchase without having to live in the property.
Current first-home withdrawal settings remain in place alongside the new farm‑related option.

If you are unsure how the new settings may affect your goals, it could be a good time to talk to us. We would be happy to review your contribution rate and overall KiwiSaver strategy.

Team Hike

Our teams from Trilogy Financial Solutions and Morris & Co Financial Advisers recently came together for a team‑building hike along the Comans Track Mercer Bay Loop.

The track proved to be more challenging than many of us expected, but the gorgeous coastal views and plenty of good‑natured banter kept everyone moving.

By the end, we were all a little out of breath but proud of the shared effort and the chance to connect outside the office.

Market Update

New Zealand

NZX 50 was around 13,094, down 3.1% over the past month as earnings downgrades and softer domestic data weigh on sentiment.
The index remains about 5.5% higher than a year ago, helped by defensives and yield names holding up in a still‑high rate environment.

U.S.

S&P 500 was around 6,797, down 2.3% over the past month as sticky inflation and shifting Fed rate‑cut expectations trigger some profit‑taking in large caps.
The index is still up about 20.8% over the past year, supported by strong tech earnings and resilient U.S. growth.

Australia

ASX 200 was near 8,686 and roughly flat to slightly lower over the month as higher bond yields offset support from a firm resources sector.
The index gained about 1.1% in a recent session, with energy and tech rallying on stabilising oil prices and a more constructive global risk tone.

Asia

Nikkei 225 reached the 55,000s, up about 2.9% over the month as a weaker yen and strong corporate results continue to attract foreign inflows.
Hang Seng was up around 2.1% over the month, helped by policy support signals from Beijing and short‑covering in beaten‑down China‑related names.

Europe

STOXX 600 was modestly lower over the month (about 0.6%) as renewed inflation concerns and higher European yields pressure valuations.
Major indexes such as the FTSE 100 and DAX were down about 0.3–0.8% over the month, with rate‑sensitive sectors lagging while energy names are cushioned by firmer oil.

Commodities

Gold was about USD 5,208 per ounce, up roughly 2.3% over the month as investors hedge ongoing geopolitical risks and uncertainty around the pace of rate cuts
Silver was up about 2–5% over the month as it recovered from an earlier crash, supported by improved risk sentiment and steady industrial demand, though prices remain below recent peaks.
Crude oil has climbed about 10% over the past month, from roughly USD 60 to around USD 66 per barrel, driven by supply concerns and the stronger‑than‑expected global demand.

Upcoming important dates

31 March

End of Financial Year 2026

8 April

Next OCR Update

Late May

Tax reports available for wrap clients

May - June

Tax reports available for managed funds clients

20 May - 10 June

TFS Quarter 2 review season

June - August

KiwiSaver member tax statement published

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.