What is OCR? The Official Cash Rate — set by the Reserve Bank. It is the rate that influences what you pay on your mortgage and what banks pay on savings. It also moves share markets.
How does a rate rise hit shares?
Higher rates make bonds and term deposits more attractive. Companies with big debts pay more interest. Growth stocks — the ones betting on future profits — often fall harder than banks that earn from lending.
What should you look at in your portfolio?
- Funds heavy in tech or speculative names.
- How much debt your top companies carry.
- Your fund label — “balanced” means different things at different providers.
What should you not do?
Do not sell everything on announcement day. Markets often price in the move before the news headline. Panic is the most expensive habit in investing.
How do you respond as a long-term Kiwi investor?
Check your fund matches your timeline. Rebalance if you are off target. Then get on with life. OCR is news — not a reason to abandon a plan you built for decades.
