Enjoy this email? We’d love you to forward it to someone else who may enjoy it.

Forwarded this email? You can sign up here. 

Here’s what you need to know today

• Israel and Iran show no signs of backing down as the countries ignore international calls for de-escalation. Over the weekend the two countries exchanged further missile strikes, with Iran hitting Tel Aviv and Israel hitting Tehran and Iranian oil fields, as previously scheduled US-Iran nuclear talks were cancelled. (NY Times)
  
  

• As conflict escalates in the Middle East, investors are looking to the oil price. Oil prices were up as much as 13% last week as investors predicted Iranian oil output would fall and grew concerned that a more serious conflict could see Iran close the Strait of Hormuz, a key shipping lane for Iraqi and Saudi oil. (Al Jazeera)
  
  

• A huge amount happened in American politics over the weekend. In Washington DC, the US Army paraded through the streets to celebrate its 250th anniversary on Donald Trump’s 79th birthday, (WSJ) while so called ‘No Kings’ protests saw protestors fill streets across hundreds of US cities. (BBC) As immigration raids continue in Los Angeles, the FBI handcuffed US Senator Alex Padilla as he tried to ask a question at a press conference. (AFR) And two Minnesota lawmakers were killed by a gunman posing as a police officer. (NY Times)
  
  

• President Trump also called the Chair of the Federal Reserve, Jerome Powell, a “numbskull” as he heaped on the pressure for the Fed to cut rates. Trump said that lowering rates by two whole percentage points would save the US $600 billion a year, “but we can’t get this guy to do it”. (CNBC)
  
  

• Australian Prime Minister Anthony Albanese has got confirmation he will meet US President Donald Trump on the sidelines of the G7 in Canada this week. Albanese has said he will raise tariffs and the recently announced review of the $368 billion AUKUS submarine deal with the US President. (ABC)
  
  

• More details are emerging about the Air India crash where more than 240 people died and one passenger miraculously survived. The plane was a Boeing 787-8 Dreamliner, adding more pressure on the beleaguered plane maker. (BBC)
  
  

• Amazon has announced it will now spend $20 billion on data centres in Australia between 2025 and 2029 to keep up with growing demand for AI. This is on top of the $9 billion already spent. (AFR)

What the…?

The latest trend in corporate wellness: Lego.

Deloitte in the US has announced a new perk for its workers, up to $1,000 reimbursed for “Legos and puzzles”. According to Deloitte’s workplace documents, it is intended to “empower and support your journey toward thriving mentally, physically, and financially and living your purpose.” (Fortune)

For our US Deloitte readers, we’d recommend taking up this perk and then never opening the box. It turns out Lego has been a great investment. Between 1987 and 2015, Lego’s resale value grew at 11% a year (outperforming stocks, bonds and gold). (Science Direct)

Investing is a lifelong journey

Here’s what you can learn today.

Asset allocation within Superannuation

Community Question: How should someone in their 30s think about their asset allocation within superannuation?

We put this question to Mat Ingram, financial adviser and Partner at Northhaven Wealth

When thinking about what drives investment returns, I would hazard a guess that most people would suspect it’s the investments themselves. It’s true that you need high-quality investments to generate a good long-term return, however, there’s a factor that’s arguably even more important.

Asset allocation determines over 85% of the investment outcome for an individual. In other words, the way cash in a portfolio is distributed among growth and defensive assets is a key determinant of investment success.

Growth assets such as shares and property have the potential to achieve higher returns over the long term. But the returns on these assets typically vary from year to year, and at times can be negative.

Defensive assets (such as cash and fixed interest), provide more consistent returns. But these returns are typically lower over the long term compared to growth assets. 

You might wonder why you’d have an allocation towards defensive assets when growth assets perform better over the long term. Enter the concept of a risk-adjusted return. 

Risk-adjusted returns can get complicated and mathematical, but to keep it simple, it refers to achieving a return while taking on a level of risk that is appropriate for you as the investor. Achieving the best possible risk-adjusted return is far more important than simply achieving the best possible absolute return.

If you jump online, you’ll find plenty of subreddits telling you that if you’re young you’re super should be in the high growth option. The thought process behind this is that you have plenty of time to ride out the volatility and achieve a great return by the time you can access your super. 

While this is true in many cases, understanding your risk tolerance before following in the wisdom of Reddit is likely a good idea. A financial adviser can help you to understand your risk tolerance and develop an asset allocation that will help you to achieve the best possible return based on your unique risk tolerance. That way, you know that your super is invested with you and your risk tolerance in mind and achieving the best possible return for you.

Interested in speaking to a financial adviser? Fill out the form on our website and we’ll match you with one of our hand-picked financial advisers that suits your needs.

Today’s sponsor is HBF

Smart investors plan for tax time.

If you're earning over $101,000 as a single or $202,000 as a family, and don't hold hospital cover, the Medicare Levy Surcharge could cost you extra at tax time.

By joining HBF health insurance and taking out hospital cover before 1 July, you could avoid the surcharge next year. You're not just covering your health, you could be saving hundreds or thousands in avoidable surcharge.

And the best part? You can get up to 14 weeks free with HBF if you take out hospital and extras cover by 17 July*.

For more details and a free tax calculator check out the HBF Tax Hub.

*New members who start eligible combined cover by 17 July 2025 on fortnightly monthly direct debit. 14 weeks free applied over 26 months. T&Cs apply.

Want more Equity Mates?