April was marked by economic uncertainty and global trade tensions, which led to market declines and volatility. These factors are expected to influence the Reserve Bank of Australia’s (RBA) cash rate decisions, alongside the recent decline in core inflation within the target range.

Australian shares slumped in early April but recovered, with the ASX 200 up 2.5% by month’s end. However, the index is down nearly 1.3% since the start of the year and may fall further, according to some commentators. In the United States, the S&P 500 regained strength after falling to its lowest point in a year.

Unemployment rose slightly in the latest figures, up to 4.1%, and consumer sentiment fell by 6% in April, reflecting unease about domestic and global developments, particularly the impact of US tariff announcements.

The International Monetary Fund (IMF) delivered sombre news for Australia, predicting lower growth than earlier forecasts this year. Despite the slowdown, the IMF states that global growth remains “well above” recession levels.

If there’s something affecting your financial situation that you’d like to discuss, please don’t hesitate to reach out to our team.

Unlike shares, bonds are not usually the flashy upstarts of the investment world, with every move reported in the media.

But the Trump Administration’s extraordinary reshaping of global trade—marked by on-again, off-again tariffs of eye-watering proportions—thrust bond markets into the spotlight, creating turmoil not unlike that seen in share markets.

With bond markets attracting more attention than usual, it’s a good time to take a closer look at this often-overlooked asset class.

What is a bond?

A bond is a bit like an interest-only loan, and there are many different types available. A government (issuing a government bond), or sometimes a large company (issuing a corporate bond), raises money by selling bonds to investors—typically to fund infrastructure or, in the case of a company, to support expansion.

Large institutional investors often favour more complex types of bonds, while retail investors are usually more interested in fixed-rate bonds. These are commonly referred to as fixed-income investments due to the regular payments (known as coupon interest) made to the investor. The original investment amount (called the face value or principal) is repaid at an agreed date when the bond matures.

Bonds can also be traded on a secondary market by investors who choose to sell before maturity. In this case, depending on the state of the markets the economy and importantly interest rates, the bond market value may be higher or lower than its fixed face value.

The most common fixed-rate bonds, issued by governments, are generally considered more stable if held to maturity. However, all bonds are assigned a credit rating by independent agencies such as Standard & Poor’s or Moody’s to reflect their risk level.

Australia’s Commonwealth Government bonds are AAA-rated, reflecting strong fiscal management, economic stability, and a low risk of default. ⁱ State governments and quasi-government organisations such as the World Bank also issue bonds. The risk level for these can vary.

Large companies seeking to expand or launch new projects often use bonds as a way to raise capital. These corporate bonds generally pay higher interest rates but are considered slightly riskier than government-issued bonds.

How to buy bonds

Investing in bonds can help diversify a portfolio and provide a steady stream of income. However, for those with limited knowledge or experience of the market, it’s essential to seek expert professional advice—speak to our team to find out more.

For instance, if you were relying on the conventional wisdom that bond markets often rise when share markets fall, recent market activity may have come as a surprise. In the United States, the usual flight to safety—shifting from volatile shares to bonds—did not occur. For a time, both markets were falling in tandem.

Although it is possible to purchase bonds directly when there is a public offer, individual investors often face barriers due to high minimum investment thresholds.

Instead, most retail investors can gain exposure to the bond market through bond funds, bond exchange-traded funds (ETFs), or managed funds. The wide range of available funds can help diversify a portfolio by providing access to different types of bonds and markets.

It’s also important to be aware of other high-risk schemes currently being promoted. These may include property-based arrangements, manipulation of non-concessional caps, dividend stripping, limited recourse borrowing arrangements (LRBAs), personal services income diversion, asset protection strategies, the creation of multiple SMSFs, and inappropriate use of reserves.

Participating in such schemes not only risks the loss of some or all of your retirement savings but can also result in serious penalties—including disqualification as a trustee and the winding up of your SMSF.

What affects bond rates?

Interest rate movements have a direct impact on bond prices in the secondary market.

When interest rates rise, bond prices typically fall. This is because newly issued bonds offer higher returns, making existing bonds with lower interest rates less attractive and reducing demand.

Conversely, bond prices tend to rise when interest rates fall. New bonds offer lower yields, so older bonds paying higher rates become more appealing, increasing demand and driving up prices.

Bond prices are also influenced by broader economic conditions and investor sentiment.

Rising inflation can lead to falling bond prices, as it erodes the real value of fixed interest payments. On the other hand, strong economic growth may also reduce bond prices, as investors often shift their preference towards shares in pursuit of higher returns. Bonds with lower credit risk in times of crisis—such as AAA-rated government bonds—typically attract higher prices due to their perceived safety.

Bond markets may not make headlines like shares—but they can still play a vital role in a balanced portfolio generally acting as a ballast for the portfolio when equity prices fall. If you’re unsure how bonds may fit into your investment strategy or want help navigating the risks and opportunities, our team is here to help. Speak with one of our financial advisers today to explore the options best suited to your goals.

If retirement is just around the corner for you – or perhaps for your children – the current financial climate may leave you feeling a little uneasy. Watching market fluctuations can lead to concerns about whether your superannuation will be enough to see you through and provide a comfortable retirement.

However, this isn’t a time for hasty decisions. If you’re feeling unsure, reviewing your current portfolio and investment strategy with one of our experienced financial advisers is a wise move.

After all, the average Australian spends around 20 years in retirement. It’s important to develop a strategy that considers not only current market conditions, but also the risks and opportunities that may arise in the years ahead. Careful planning is essential when preparing for retirement, as decisions made now can have a long-term impact.

As one of your most significant retirement assets, your superannuation deserves a carefully considered assessment—especially as you approach a new life stage.

Here are five useful tips to help ease you into the next chapter.

1. Review your risk profile and portfolio allocation

Generally speaking, investors adopt a high-growth approach when they’re younger to take advantage of potentially higher returns. However, as with typical share market cycles, there will be periods of fluctuation. Having a long-term strategy in place allows time to recover from market downturns before retirement.

2. Calculate retirement expenses

For some, the cost of living may decrease after finishing work, due to reduced expenses such as commuting and maintaining a work wardrobe. However, if you plan to travel more, purchase a new vehicle, or renovate your home, these additional expenses need to be factored in when calculating how much you’ll need.

According to the Association of Superannuation Funds of Australia (ASFA), the average annual budget to maintain a comfortable lifestyle in retirement is $73,077 for a couple and $51,805 for a single person. To maintain a modest lifestyle, ASFA estimates a couple will need $47,470 per year, while a single person will need $32,897. Both estimates assume you already own your home.

You can find easy-to-use budgeting tools on the MoneySmart website to help you calculate your expenses and estimate your income from super and the Age Pension.

3. Take action on mortgages and loans

Starting retirement with manageable or low levels of debt can help you feel more financially stable.

If you’re still repaying a mortgage after retiring, you might consider downsizing your home or using your superannuation to reduce the debt. However, it’s important to consider the tax implications and ensure any actions comply with superannuation laws.

If you’re exploring either of these options, our expert financial advisers can explain your choices and obligations in detail.

4. Checking your timing

Knowing when and how you can access your superannuation is essential for effective retirement planning.

You can start using your super to fund your retirement once you reach your preservation age, which is generally age 60. You may also choose to begin a Transition to Retirement Income Stream (TRIS) while continuing to work.²

Alternatively, if you continue working beyond your preservation age, you can withdraw your super once you turn 65—regardless of your work status.

There are also limited circumstances where you may be able to access your super early, such as in cases of severe illness or financial hardship. However, strict eligibility criteria apply.³

5. Decide how to withdraw your funds

You may be able to withdraw your super as a lump sum, depending on the rules of your fund. This could be the entire balance or a portion of it, or you may choose to receive regular payments instead.

If you opt for regular payments (made at least once a year), this is known as an income stream. At this point, your super account moves from the accumulation phase—where contributions are made—to the pension phase.

Once you begin drawing an income stream from your super, you must meet minimum withdrawal requirements. For example, if you are under age 65, you are required to withdraw at least 4% of your super balance each year. This drawdown rate increases as you get older.⁴

Seek professional advice

Planning your retirement with confidence starts now. Whether you’re looking to maximise your super, reduce debt, or make sense of your income options, our experienced financial advisers can help you and your loved ones make informed decisions for a more secure financial future.