August 2026

As we begin to wrap up the winter season, we can embrace the last of the cooler days and make the most of the opportunities the months ahead may bring.

July provided some welcome signs for the Australian economy, although inflation pressures persist. CPI eased to 3.8% in the year to June, down from 4.0% in May, supporting expectations that the Reserve Bank may be less likely to raise interest rates in the short term. But underlying inflation was unchanged at 3.6% because of persistent price pressures.

Consumer confidence improved a little, rising 4.1% to 83.9 in July. Despite the gain, sentiment is still deeply pessimistic.

Oil prices were volatile throughout July but ended well below the peaks reached earlier in the year.

Australian share markets finished the month stronger, with the ASX 200 moving above 9,000 points following the latest CPI figures. But caution in US markets following the Federal Reserve’s decision to keep rates on hold tempered sentiment.

The Australian dollar delivered a resilient performance throughout July to close above $0.70, hitting a six-week high.

Market movements and review video – August 2026

Stay up to date with what’s happened in the Australian economy and markets over the past month.

AI is changing everything. Does your portfolio need to?

It can feel as if artificial intelligence (AI) makes its way into almost every conversation, and especially for investors. From headlines about trillion-dollar technology companies to predictions that entire industries will disappear, we are being bombarded with AI news, forecasts and investment themes every day.

For investors, the challenge is in determining who will ultimately capture the value and how to avoid concentrating portfolios around a handful of highly publicised winners.

The most sensible response may be the least exciting: stay diversified, invest regularly and resist the temptation to chase the latest AI headline.

Beyond the AI giants

Much of the media attention has focused on the companies developing AI models and infrastructure. These include “The Magnificent Seven” firms such as Nvidia, Microsoft, Alphabet, Apple, Amazon, Meta and Tesla, which are investing hundreds of billions of dollars into AI-related infrastructure and services.

These companies have obviously benefited from the AI boom. Nvidia, for example, has become one of the world’s most valuable companies because its graphics processing units (GPUs) power much of the world’s AI computing capacity.

But successful investing rarely comes from simply identifying a major trend. The important question is who benefits most and for how long.

History shows that new technologies often create value far beyond the companies that invent them. Railways, electricity, automobiles and the internet all reshaped economies, but the eventual winners were not always the pioneers that first captured investors’ attention and there were casualties along the way.

Categorising AI

Investors can think of AI opportunities in three broad categories.

The first category is the direct AI beneficiaries such as semiconductor manufacturers, cloud computing providers, data centre operators and AI software developers. These are the companies building the infrastructure and tools that enable AI.

The second category includes businesses that successfully use AI to strengthen their competitive advantages. These companies may not be seen as AI businesses, yet they stand to benefit significantly through higher productivity, lower costs, improved customer experiences and new revenue streams.

 The third category includes businesses that indirectly benefit from AI-driven investment. Growing demand for data centres, computing power and electricity is creating opportunities for resource companies, energy infrastructure providers, network operators and industrial businesses.

Private equity and venture capital

Investors focusing solely on listed markets may be seeing only part of the AI story.

Beyond the listed market, many of the most innovative AI businesses remain privately owned. AI companies attracted almost half of all global venture capital funding in 2025, as investors backed startups developing applications in areas such as healthcare, robotics, autonomous systems, cybersecurity and enterprise software.ⁱ

For investors with access to diversified private market investments, exposure to venture capital and private equity can provide participation in AI innovation beyond the listed market. However, these investments typically involve higher risk and reduced liquidity.

The risk of AI ‘roadkill’

Every technological revolution produces winners and losers.

During the internet boom of the late 1990s, many investors correctly identified that the internet would transform society. What they got wrong was assuming every technology company would prosper. Many failed.

As with every major technological shift, AI is likely to leave some casualties behind.

Businesses that rely on repetitive information processing, basic content creation or undifferentiated software solutions may find themselves under significant pressure. Companies whose products can be easily replicated by increasingly capable AI tools could see profit margins erode.

The challenge for investors is that identifying future casualties in advance is rarely straightforward. That’s why diversification remains so important.

Why diversification wins

The biggest investment risk may be in becoming overexposed to a small number of companies that seem to be unbeatable today.

Technology leaders change over time. Diversification acknowledges this uncertainty.

Some of the strongest beneficiaries may emerge from unexpected areas such as energy infrastructure, industrial automation, logistics, healthcare or specialised software. Others may come from venture capital and private equity portfolios that provide access to innovations before they reach public markets.

Diversification also helps investors resist the temptation to chase every new headline. In a rapidly changing AI landscape, spreading risk across sectors, asset classes and business models may prove more valuable than trying to pick every winner.

i State of Venture 2025 | CB Insights Research

Life moves fast. Is your insurance up to speed

Life moves fast. Is your insurance up to speed?

Life rarely stands still. A new home, a growing family, a career change or the transition to retirement can all have a significant impact on your insurance needs.

Yet insurance is often one of those financial arrangements that gets filed away and forgotten. Over time, that can leave you underinsured, paying for cover you no longer need, or relying on arrangements that no longer reflect your circumstances.

That’s why it’s worth checking your insurance annually to make sure it still fits your life.

When life changes, check your cover

Many people take out insurance and then rarely look at it again. But the amount of cover that was appropriate five or ten years ago may not be suitable today.

Consider some common life events:

• Buying, building or renovating a home
• Getting married or entering a new relationship
• Having children
• Separating or divorcing
• Taking on a larger mortgage
• Starting or selling a business
• Approaching retirement

Each of these milestones can change both the level and type of insurance you need. For example, a growing family may require increased life insurance to protect loved ones financially. Conversely, someone who has paid off their mortgage and whose children are financially independent may find they need less cover than they once did.

Check your valuations

One of the most common insurance mistakes is failing to update valuations.

Property values and replacement costs have risen significantly in recent years. Construction costs, building materials and labour expenses may mean that rebuilding a home after a major loss could cost far more than expected.

The same applies to contents insurance. Think about how many valuable items may have been added to your home over time, such as electronics, furniture, jewellery, sporting equipment or appliances. A quick estimate made years ago may no longer reflect the true value of your possessions.

Business owners face similar challenges. Equipment, stock, technology and business interruption costs can all change substantially over time.

A regular review can help identify potential gaps before they become costly surprises.

Are your beneficiaries still the right people?

Life insurance and superannuation death benefit nominations deserve particular attention.

The people you intended to benefit from your insurance years ago may no longer be the people you would choose today. Marriage, divorce, the birth of children, blended families and changing personal circumstances can all affect your wishes.

Reviewing beneficiary nominations regularly helps ensure your proceeds are directed according to your current intentions rather than outdated paperwork.

This is especially important after major life events. An old nomination that no longer reflects your circumstances can create unnecessary complications and stress for loved ones at an already difficult time.

Don’t forget income protection

Many people insure their home, car and contents, yet one of their most valuable assets is often their ability to earn an income.

Income protection insurance can help replace a portion of your income if illness or injury prevents you from working. As your salary, expenses and financial commitments change, it makes sense to review whether existing cover remains appropriate.

If you’ve recently received a promotion, changed careers, become self-employed or taken on additional financial responsibilities, your current level of cover may not provide the protection you expect.

Review your premiums and policies

Insurance products evolve over time and so do premiums.

A review may reveal that you’re paying for features you no longer need or that changes in your circumstances mean you require additional cover. It can also help you assess whether you’re receiving good value for the premiums you’re paying.

But it’s important not to focus solely on price. A cheaper premium may come with reduced benefits, stricter conditions or exclusions that limit protection when it’s needed most.

The goal is not necessarily to find the cheapest policy but to ensure you’re receiving appropriate value for the cover you have.

Major life events are a natural trigger to revisit your insurance. Even if nothing significant has changed, it’s worth checking your cover each year to make sure it still reflects your needs.

The best time to review your insurance is before you need it.

If your circumstances have changed or you can’t remember the last time you checked your cover, speaking with your financial adviser can help identify any gaps, overlaps or opportunities to update your protection.

What’s a ‘sleep debt’? Can I ever pay it back? An expert explains

Maybe you’re a new parent or someone who lies awake at night. If so, you may have started to worry you’re not getting enough sleep.

Sleep wearables don’t help. They can show your “sleep debt”, a running total of how far you’ve fallen behind.

But the word “debt” assumes your sleep works like a bank account. It assumes lost hours stack up, carry over, and you must eventually repay them in full.

But sleep doesn’t really work this way. And chasing “enough sleep” may not be helping.

What is a sleep debt?

Two systems control your sleep. One is your body clock, which helps keep wakefulness and sleep aligned with the day and night. The other is the one that matters here: sleep pressure.

Sleep pressure builds the longer you stay awake and eases while you sleep. At its highest, it’s hard to resist. Someone pulling an all-nighter might find themselves nodding off unintentionally.

This biological process is what “sleep debt” is trying to describe. If you sleep less than your body needs, pressure for sleep builds. Given the opportunity to recover after lost sleep, you sleep longer. In this broad sense, the debt metaphor works.

But this metaphor has some assumptions that don’t fit with our biology.

If you have a financial debt, the maths is exact: you owe a precise sum, which stays there until you pay it down. Sleep pressure does none of those things. Our sleep systems are more dynamic and adaptable.

What happens next?

To study the effects of short sleep, researchers bring volunteers into a lab and restrict how much they can sleep, such as four or six hours a night, sometimes for a week of two. Watching what happens under these conditions tells us how our body handles the shortfall.

The first thing it does is reorganise. When sleep is cut short, the body protects its deepest sleep (the stage that does most of the restorative work) and sacrifices lighter sleep.

People also fall asleep faster and spend less time awake in bed. In other words, given less time, the body spends that time more carefully and efficiently.

When people are freed from sleep restriction conditions, we watch what the body does to recover. “Recovery sleep” is characterised by a few nights of longer, deeper sleep. After this point, the debt appears to be cleared. But you do not sleep “back” the same number of hours you lost.

What this means in everyday life is that after a run of short nights, you tend to sleep a little longer and deeper for a night or two, then your sleep settles back to its usual length.

What about the sluggishness that follows after a few nights of short sleep?

These same sleep experiments also measure sleep-sensitive outcomes such as cognitive performance.

These outcomes follow their own recovery timelines and often take a little longer to return to baseline. You may have had all the recovery sleep you are going to get, but you still need a few more nights of normal sleep before your cognitive performance catches up.

Could knowing my sleep debt make things worse?

Receiving feedback about the previous night’s sleep seems to affect your mood, energy levels and alertness the next day.

One study showed giving participants negative feedback about their sleep – for example “your sleep quality was poor” – made them feel more tired and negative the next day.

Another small experiment showed people’s cognitive performance was influenced by how long participants believed they had slept.

No study has directly examined what happens if we tell people how much sleep debt they have. But, based on what we know, it is possible that knowing it can make you more worried about your sleep, and have worse sleep as a result.

False precision and moving targets

There is a deeper problem with the whole idea of calculating a sleep debt.

To calculate a debt, you need to know exactly what you owe in the first place, that is, a precise idea of how much your body needs. Trackers try their best to model how much sleep you need, but it is a slippery number.

How much sleep someone needs varies widely from person to person. Some healthy adults feel fine on around six hours, others need closer to nine.

How much sleep you need is not fixed. You need more sleep when unwell or start training hard at the gym. Sleep shifts with the seasons, with people generally sleeping more in winter.

Sleep trackers also estimate how much sleep you had overnight. They are increasingly accurate, but this is still an estimate, not the truth. So, trackers measure one guess (how much we slept) against another (how much we need).

The bottom line

Sleep debt is a handy metaphor to help us understand sleep regulation. Sleep pressure builds the longer you’re awake, and a short night can leave you needing a longer one to follow.

However, the way our bodies manage short sleep is not an ever-accumulating tally you must repay in full. To calculate a debt you’d also need to be certain how much you need and how much you got, which are both hard to know.

The good news is that we are built to withstand and recover from the times life gets in the way of a good night’s sleep. There’s no need to carry a ledger or chase a sleep debt to zero.

Source: This article is republished from The Conversation

What lies ahead for property investors?

Property investors are facing a whole new world this financial year following the tax reforms announced in the May Federal Budget, the ATO tightening the rules around claiming deductions for holiday homes and the government’s decision to abolish the ability to purchase residential property through self-managed super funds (SMSFs).

While there is no need to panic, the reforms will usher in significant change and require careful thought and detailed modelling of the financial implications for your investment portfolio and cash flow going forward.

New Capital Gains Tax rules

Major reforms to the CGT rules are set to take effect from 1 July 2027. The changes mean property investment assets held for more than 12 months will no longer receive a 50 per cent discount on their capital gain before tax. This will be replaced with cost-based indexation, with gains adjusted for inflation before CGT is applied.ⁱ

A minimum 30 per cent tax rate will also be introduced for net capital gains from 1 July 2027 and will apply to individuals, partnerships and companies. These tax changes will also apply to discretionary trusts from 1 July 2028.

Any capital gains made on an investment property that was held for more than 12 months and sold before 1 July 2027 will be taxed under the existing 50 per cent CGT discount rules. Gains after this date will be taxed using the new minimum 30 per cent rules.

With the window to take advantage of the current 50 per cent discount rule closing on 30 June 2027, property investors contemplating selling a rental property should seek professional advice to understand how these changes could affect their financial position.

Negative gearing changes

One of the most controversial Budget changes is to limit negative gearing for residential property investments to new builds.ⁱⁱ

Properties held prior to Budget night (12 May 2026) are exempt from these changes, but use of negative gearing by taxpayers purchasing established properties will be restricted. For commercial property, the current negative gearing rules continue with no change.

From 1 July 2027, investors who purchase an existing property will only be able to offset their residential investment property losses against other income from residential properties. This includes any capital gains. Excess losses can be carried forward to offset against residential property income in future years. The changes will apply to individuals, partnerships, companies and most trusts, but widely held trusts and super funds (including SMSFs) will be excluded.

New rules for holiday homes

If the Budget proposals aren’t enough to give property investors a headache, the ATO has made it clear its approach to holiday home tax deductions will be tougher.ⁱⁱⁱ
Following the release of a new holiday home tax ruling, owners will now be restricted to minimal private use each year if they wish to retain access to tax deductions.

From 1 July 2026, deductions for ownership costs like mortgage interest, council and water rates, insurance, repairs and maintenance may be denied depending on when and the way a holiday home is used. Advertising and cleaning expenses, booking fees and commissions remain deductible.

Personal use during peak periods is now a signal that a property is primarily a leisure asset rather than an income-producing one. If the property is available for most of the year, but is blocked out during Christmas, Easter, school holidays and local peak periods, it is now likely to be assessed as a property that is not mainly used to generate income.

Time to reassess your property portfolio

Given this strict new interpretation of the deduction rules by the ATO, the Budget tax reforms to CGT, along with the banning of SMSFs from Limited Recourse Borrowing Arrangement (LRBA) for residential properties, property investors are urged to seek professional advice early on and review their property investment strategy in light of the changes.

Transitional rules, valuation approaches and record-keeping requirements will be critical. Investors should ensure documentation is up to date, consider timing of transactions carefully.

If you would like to discuss any of the changes and how they may affect you, please contact our office today.

i Proposed reforms to the CGT rules |Treasury
ii Negative gearing explainer | Treasury
iii Rental property deductions | ATO

How to maximise the impact of your inheritance

Australia’s $3.5 trillion wealth transfer: how to invest an inheritance wisely

Australia is entering one of the largest intergenerational wealth transfers in its history. Over the next two decades, Australians aged 60 and over are expected to transfer around $3.5 trillion in wealth¹. As more Australians receive an inheritance, taking time to develop a clear plan may help turn inherited wealth into long-term financial security.

Whether your inheritance is a modest sum or worth millions, taking time to develop a clear investment strategy may help ensure the funds support your long-term financial goals.

The first steps…

Receiving an inheritance often comes with a mix of emotions, which can make it difficult to think long term. Rather than rushing into financial decisions, taking time to develop a clear plan may help you make the most of the opportunity.

An inheritance may come in the form of cash, property, shares, managed investments or superannuation benefits. Each type of asset may be subject to rules around their transfer and relevant capital gains or estate taxes. Those rules can be confusing, so it may be helpful to get accounting, legal or wealth-planning advice early to ensure major decisions are made with a full understanding of the implications.

What does a financial plan look like?

A well-structured financial plan may help you make the most of an inheritance and ensure it supports your long-term goals. Consider starting with the following:

• Conduct a financial stocktake. Review your income, savings, debts and existing investments to understand your overall financial position. Before investing an inheritance consider whether paying off any high-interest debt or setting aside an emergency savings buffer could provide greater financial security.
• Set clear financial goals in line with your new inheritance. Are you looking to cut debt, save for an event, or secure your retirement? Defining your priorities will help shape your strategy.
• Develop a savings and investment strategy. Once you have a clear understanding of your financial position and goals, consider how your inheritance could be allocated to support them. This may involve balancing shorter-term priorities, such as travel or education expenses, with longer-term objectives, such as retirement. Diversifying across different asset classes, including shares, fixed income, cash and exchange-traded funds (ETFs), may help manage risk and support long-term growth. Avoiding excessive exposure to a single investment or asset class may also help create a more resilient portfolio.

Common mistakes to avoid

People often think of an inheritance as unexpected money rather than part of a long-term financial plan. This can lead to people making decisions that feel rewarding in the short term but do little to improve long-term financial well-being. Common mistakes include making large lifestyle upgrades too quickly, leaving sums in cash in low interest accounts, ignoring tax implications and failing to consider diversification.

Don’t forget your superannuation and family trusts

Depending on individual circumstances, contributing some of your inheritance to superannuation may offer tax advantages, although contribution caps, eligibility requirements and tax outcomes may vary. Consider seeking financial advice to understand how super rules apply to your situation.

Other investment structures such as family trusts may also play a role in managing wealth. Depending on your circumstances, they may offer tax planning opportunities. Some people may also choose to use part of their inheritance to support charitable causes, including through donations to deductible gift recipient (DGR) organisations.

Turning a windfall into a legacy

An inheritance is about more than money. For many people, it represents the legacy of a loved one and the culmination of years of saving, investing and planning.

While every situation is different, understanding your goals, maintaining a diversified approach and focusing on long-term outcomes may help transform inherited wealth into lasting financial security.

Footnotes:
^{1. Productivity Commission, Wealth Transfers and Their Economic Effects (2021)
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Putting healthspan at the heart of your plan

There is something deeply hopeful about the fact that we are living longer than previous generations. Advances in medicine, safer living conditions and better healthcare have given many of us more time than our grandparents could have imagined. 

But alongside that good news is a quieter reality that deserves attention. 

Researchers now talk about the difference between lifespan and healthspan. Lifespan being the total number of years we live and healthspan is the number of those years we live in relatively good health, free from chronic illness or disability. 

Ideally, those two would move closer together. Increasingly, they are not. 

Globally, the average gap between lifespan and healthspan is now 9.6 years. Around the year 2000, that gap was closer to 8.5 years. By 2019 it had widened to 9.6 years, an increase of roughly 13 per cent in less than two decades.ⁱ In human terms, that means many people are spending close to a decade of later life managing ongoing health conditions rather than enjoying full independence and vitality. 

Those years matter. They are years spent adjusting, adapting and sometimes relying on more support than expected. 

The changing shape of ageing 

Today, many of the conditions that shape later life are chronic rather than sudden. Heart disease, diabetes, arthritis, respiratory illness and cognitive decline often develop gradually and require long-term management. 

These are not just medical diagnoses. They influence how easily someone can travel, maintain a home, participate in community life or simply move comfortably through their day. 

Life expectancy here remains among the highest in the world, which is something to appreciate. But living longer also increases the likelihood of living with at least one ongoing health condition. Women, in particular, tend to live longer than men and often spend more years managing illness. 

This is not a reason for alarm. It is a reason for thoughtful preparation. 

Why this conversation belongs in financial planning 

When most people think about retirement planning, they think about numbers. How much is enough? How long will savings last? What return might be achievable? 

But behind every financial plan is a human story. 

A longer life can bring extraordinary opportunities: more time with family, more experiences, more freedom. It can also bring periods of vulnerability. Planning with compassion means acknowledging both possibilities. 

Even within a strong public healthcare system, there can be significant ongoing out-of-pocket costs. Specialist appointments, diagnostics, medications, dental care, physiotherapy, mental health services and other supports can become part of regular life over time. 

Private health insurance premiums also tend to rise with age. Having a financial buffer can ease stress during times when health already demands attention. 

Support at home or in care 

Many people hope to remain at home as they age. That may involve home modifications, mobility equipment or in-home assistance. If residential aged care becomes necessary, accommodation payments and ongoing fees can meaningfully affect retirement savings. 

Thinking about these possibilities in advance is not negative. It is an act of care for your future self and for those who may help support you. 

Protecting quality of life 

Healthspan is not only about avoiding illness. It is about preserving dignity, connection and purpose. It is about being able to visit loved ones, participate in meaningful activities, pursue interests and remain engaged with the world. 

Financial flexibility helps protect those choices. It allows room to adapt, rather than react. 

Planning for both vitality and uncertainty 

The widening gap between lifespan and healthspan gently reminds us that retirement planning is about more than longevity projections. 

Some people will enjoy decades of robust health. Others may face health challenges earlier than expected. A well-constructed financial strategy considers both strength and uncertainty. It balances enjoying the present with preparing for potential future care needs. 

At its heart, planning is not about fear. It is about reassurance and confidence. 

Adding life to years 

Living longer is a gift. But the real aspiration for most of us is not simply to add years to life. It is to add life to years. 

Understanding the growing divide between healthspan and lifespan allows for more honest conversations about what ageing may look like. And it reinforces why financial planning is ultimately about wellbeing, not just wealth. 

A thoughtful plan cannot control every outcome. But it can provide stability, options and peace of mind. And in the later chapters of life, those things matter deeply. 

i Washington Post | wellness