We hope you’ve had a relaxing summer break.
We are excited for a promising year of investing ahead.
The team at Trilogy is back, refreshed, and ready to assist you with all your investment, lending, and financial planning needs.
Please note that Chiti remains in Sri Lanka and will be back in the office after Waitangi Day.
He will be working remotely, though, so if you have any urgent matters, please feel free to contact him via WhatsApp or FaceTime.
As always, we encourage you to reach out to us with any questions or concerns.
We have a host of fund managers scheduled for interviews throughout the year, providing valuable insights into the market.
Next month, we have an exciting guest lined up for an interview. Please stay tuned for more details!
We look forward to working with you in 2025.
If you have any queries or concerns about 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 Trilogy Team
Things to watch in 2025
Here are some key things to look out for in the markets in 2025.
NZ market may outperform: Low valuations, underweight positioning, and improving economic conditions could drive NZ share market gains.
NZ interest rates to fall further: To invigorate the economy, we anticipate further reductions in New Zealand's Official Cash Rate (OCR). The neutral cash rate is projected to hover around 3.50% in the medium term. A decrease in the OCR will likely lead to a further decline in short-term mortgage rates. However, long-term mortgage rates (2-, 3-, and 5-year terms) may not experience a substantial drop due to persistently high borrowing costs in the global debt market. Since most New Zealand banks rely on overseas debt markets, global interest rates significantly influence domestic interest rates.
US policy uncertainty: Trump's policies (tariffs, tax cuts) pose risks and opportunities. Bessent's appointment may moderate some of these.
US exceptionalism may fade: Rising US interest rates and the potential for stagflation (inflation remaining high, an increase in unemployment, and low economic growth) could weaken the USD. Managing the currency exposure becomes important when there is currency volatility.
Australia faces challenges: High inflation, rising rates, and a slowing economy create headwinds for the Australian economy.
Inflation may remain elevated: Core inflation remains above pre-pandemic levels, despite recent disinflation in some areas.
Equity returns may be modest: Historical data suggests that equity returns after a few good booming years can be modest. However, it’s important to have exposure to growth assets to hedge against inflation and achieve potential higher returns than cash over the long term.
AI intensifies climate impact: Growing AI and data centre energy consumption poses challenges for climate goals.
Geopolitics may gain importance: Middle East tensions and the risk of a global trade war could impact markets.
NZ may increase private market investments: The growing private credit market, maturing VC sector, and lower expected equity returns may drive this shift.
Emerging risks: Bird flu, climate change, solar flares, and potential nuclear fusion breakthroughs are among the potential tail events.
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