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Here’s what you need to know today

• Delegations from Ukraine and Russia met in Turkey for their first direct peace talks in three years. While each side agreed to exchange 1,000 prisoners of war, a Ukrainian spokesperson suggested there is a long way to go and said Russia “voiced a number of things which we deem unacceptable”. (Al Jazeera)
  
  

• US President Donald Trump said that America doesn’t have time to negotiate individual trade deals with each country so his administration will decide what tariff rates will be “over the next two to three weeks” and that trade partners should expect letters telling them what “they’ll be paying to do business in the United States”. (Axios)
  
  

• Last week, America’s stock market had its second best week of 2025. The S&P 500 index rose 5.3% in a week and is now up 20% from its post-Liberation Day low on 8 April. (AFR)
  
  

• All eyes are on the Reserve Bank of Australia this week as the Board meet today and tomorrow to decide on the direction of Australia’s cash rate. Economists and major banks are all-but-certain a rate cut is coming. (ABC News)
  
  

• There is growing pressure on Treasurer Jim Chalmers’ proposed tax on earnings of Superannuation balances of more than $3 million, even when the gains are unrealised (i.e. an asset increases in value but is not sold). (The Guardian)
  
  

• Novo Nordisk, the Danish pharmaceutical maker behind Ozempic, announced it would be changing CEOs amidst falling profit and losing market share to rival GLP-1 drug maker Eli Lilly. Novo Nordisk’s share price is down 54% in the past 12 months. (BBC)
  
  

• Cofounder and CEO of Dicker Data, David Dicker, has announced he is stepping down after 47 years running the computer hardware and software distributor. Since listing on the ASX in 2011, Dicker Data is up over 3,400%. (Capital Brief)
  
  

• Australian private health insurer Bupa has announced plans to become one of Australia’s largest providers of mental health services with plans to open 60 mental health clinics over the next 3 years. These clinics would offer face-to-face and tele-health sessions with psychologists and would be available to the general public, not just Bupa members. (AFR)
  
  

• America’s credit rating was downgraded by Moody’s from AAA to Aa1. This is not the first ratings agency to downgrade the US Government, S&P Global lowered America in 2011 and Fitch Ratings in 2023. Moody’s explained the downgrade reflects “the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns”. (Reuters)

What the…?

Data breaches in Australia hit an all time high in 2024. The Office of the Australian Information Commissioner received 1,113 data breach notifications from businesses and government agencies, up 25% on 2023 and the highest since organisations were required to notify the OAIC in 2018.

Topping the list were the health industry (with 20% of breaches) and the federal government (at 17%). The most common cause of data breaches was malicious or criminal cyber attacks, accounting for 69% of breaches in the second half of 2024. (Capital Brief)

Investing is a lifelong journey

Here’s what you can learn today.

Splitting your money across asset classes

Community Question: Assuming property is not an option in the short term, whats the recommended portfolio split across cash, fixed income, equities, crypto? In my early 30s.

We put this question to Luke Laretive, financial adviser and CEO of Seneca Financial Solutions. Here’s what Luke thought:

While bonds have delivered more stable returns (6% volatility, 15% max drawdown) equities have made investors a lot more money (12% total return) - assuming you stuck with it and held your nerve during the drawdowns.

In your early 30’s, chances are you’ll be making many more contributions to your investment account and as such, you want to take advantage of your long investment runway and compound at the highest possible rates of return. Any volatility you experience is only an opportunity to pick additional shares “on-sale”.

However, what you actually should do depends on more than your age.

Generally speaking, it's not unusual for young people to have between 70-100% of their assets in shares and the balance in defensive asset classes like bonds/fixed income. While we can debate the value of active management in equities, I think that’s a much harder case to argue in the fixed-income universe.

I think many people mistakenly neglect the benefits of an allocation to defensive absolute return strategies and liquid alternatives, as opposed to bonds - where you can generate higher rates of return, but with lower volatility and little to no correlation to traditional equities. Selecting the right mix of managers to achieve this requires some knowledge and skill - at Seneca, we use ours to manage our Absolute Return SMA that invests in these sorts of strategies.

These concepts can also be applied to pre-retirees and retirees, for whom managing the risk associated with a potential drawdown becomes critical. Given we don’t know when these equity drawdowns are going to occur, it would make sense that as we near retirement (or some other catalyst where we need to realise our investments), we reduce our exposure to that sequencing risk, and increase our allocation to fixed income or other low/uncorrelated investments.

Interested in speaking to Luke or another of our hand-picked financial advisers? Fill out the form on our website and we’ll connect you.

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