18 September 2025
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Introduction
Markets never stand still. From shifting interest rate regimes to geopolitical uncertainty and the disruptive rise of artificial intelligence, investors today face both heightened risks and significant opportunities.
At Emanuel Whybourne & Loehr, we believe that navigating these forces requires discipline, perspective, and a willingness to adapt. Below, we explore three themes currently shaping global portfolios —interest rates, geopolitics, and AI — and what they may mean for investors seeking long-term success.
Interest Rates: The Dog, the Tail, and the Investor
Interest rate policy remains the foundation for asset pricing. When safe assets like cash deliver higher yields, risk assets need to offer more to remain attractive.
As Ryan Loehr noted in the latest episode of The Exchange podcast:
“The higher the return on safe assets like cash, the higher the premium required across every other class.”
Craig Emanuel has described inflation as the “tail that wags the dog” — the ultimate driver of Central Bank decisions. Rate cuts may come, but inflationary and deflationary forces, including the productivity gains of AI, will determine their extent.
Investor takeaway: Markets may have priced in fewer cuts than could eventuate. Lower rates could lift equity valuations and ease the cost of capital for private businesses.
Geopolitics: Avoiding Paralysis by Analysis
From wars in Eastern Europe and the Middle East to US tariff disputes, geopolitics dominates the headlines. Yet while such events can drive short-term volatility, they rarely determine long-term outcomes.
“There’s always something to worry about. Over my entire career, there’s always been some crisis. And yet markets adapt. Optimists make the most money.”
- Tim Whybourne
This doesn’t mean ignoring risks. Tariffs, for example, can compress company margins and dampen consumption. But fundamentals — earnings, valuations, and growth — typically remain the true drivers of portfolio construction.
Investor takeaway: Periods of volatility can sometimes present opportunities for investors to access quality assets at more attractive valuations.
Artificial Intelligence: From Hype to Structural Change
Few forces are as transformative as artificial intelligence. What was once speculative is now creating measurable impacts in business, markets, and productivity.
- Efficiency gains: Automation is improving margins and reducing costs for companies able to integrate AI effectively.
- Energy consumption: Advanced AI prompts consume enormous amounts of energy, creating investment opportunities in infrastructure, chips, and power systems.
- Three phases: AI will progress through buildout, adoption, and transformation. Each stage will create winners and losers.
- Human impact: Goldman Sachs projects up to 8% of jobs could be displaced by 2030, while other estimates are significantly higher.
In the latest episode of The Exchange podcast, Tim Whybourne offered a practical example:
“We were all AI novices compared to a 20-year-old intern. And she did the work of three people. That shows how transformative this technology already is.”
Investor takeaway: AI is no longer theoretical. Some investors are looking not just at technology leaders but also at “picks and shovels” such as infrastructure and energy.
Portfolio Construction: The Private Markets Advantage
While public markets have enjoyed strong performance in recent years, private markets continue to attract attention for their potential role in diversified portfolios.
- Private equity & credit: These can provide access to institutional-grade businesses at lower multiples than listed peers.
- Property & infrastructure: With contractual cash flows, such assets may provide defensiveness and income replacement for business owners exiting liquidity events.
- Strategic structures: Craig offers the reminder that tax and entity structures are as important as portfolio composition — no family wants to hand “49 cents in the dollar back to the tax man.”
- Alternative exposures: From venture capital to Bitcoin, some investors are considering allocations, though these involve significant risks and are not suitable for everyone
Investor takeaway: For certain investors, private markets can play an important role in diversifying portfolios and accessing opportunities that differ from public markets.
Implications for Australian Investors
For Australian families and business owners, these global themes have local consequences:
- Interest rates: The RBA often lags the US Fed, but its moves ripple through property, superannuation, and lending markets.
- Geopolitics: As a resource-exporting economy, Australia is particularly exposed to tariff disputes and commodity demand shifts.
- AI and innovation: Australia’s venture ecosystem is growing, but access is limited. Advisers with institutional-grade networks, like Emanuel Whybourne & Loehr, can provide important pathways.
- Private markets: Domestic private credit and infrastructure — particularly in energy transition projects — are increasingly accessible to family offices and HNW clients.
Practical Steps for Investors
Domestic private credit and infrastructure — particularly in energy transition projects — are increasingly accessible to family offices and HNW clients.
- Liquidity requirements: Determining how much capital can be allocated to illiquid private markets.
- Portfolio resilience: Exploring how different inflation and interest-rate scenarios may affect outcomes.
- Growth allocation: Considering whether exposure to private equity, venture, or AI-driven opportunities is appropriate given risk appetite.
Conclusion
Interest rates, geopolitics, and artificial intelligence are reshaping markets in profound ways. For investors, the challenge is not predicting the next headline but building resilient portfolios that capture opportunity while protecting wealth.
By focusing on strategic structures, quality assets, and transformative themes, investors can position themselves for long-term success.
For a deeper dive into these themes, listen to our recent episode of The Exchange podcast with all three partners and hosted by Associate Adviser Mitch Finnen here.
