September 8, 2026 • 7 mins
David Frame says why interest rates and inflation are the key issues that investors are talking about in the current economic climate.
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Speaker 1 (00:00):
A muster financial segment with Craig's investment partners in Gore.
This information is general in nature and is not financial advice.
Craig's investment partners limited financial advice provider disclosure statement can
be found at craigsip.com.
Speaker 2 (00:17):
David Frame of Craig's Investment Partners joins us once again
on this hump day.
Speaker 3 (00:22):
G'day, David. G'day, Andy.
Speaker 2 (00:24):
How's it going? Pretty good.
Speaker 1 (00:25):
Good.
Speaker 2 (00:26):
Excellent. A dry day or two makes a bit of
a change to the mood after what we've endured.
Speaker 3 (00:31):
Yes, I'd love to see a few more sunny days
out there and for the paddocks to dry off. Ours
are shocking at the moment.
Speaker 2 (00:38):
How much land you got?
Speaker 3 (00:39):
We've got nine acres. It's enough for a townie.
Speaker 2 (00:42):
What are you running on? Come on, what stock units?
Speaker 3 (00:44):
Oh, the neighbour's sheep, but he's taken them back for lambing,
so we'll just wait and hopefully the grass grows for
some baleage.
Speaker 2 (00:51):
It'll happen. It'll happen at Southland. Interest rates, big talk
at the moment, a lot of talk around them with
the OCR rising last week and the flow-on effect. Plenty
to talk about in that respect.
Speaker 3 (01:03):
Yes, the OCR raised last week to 2.5%, actually 2.75%,
but it lifted in July. So interest rates are on
the move. Inflation's a lot higher than was forecast, and
that's mainly because fuel prices have stayed high because of
the whole debacle in the Middle East. It looks as
(01:24):
though interest rates might rise another quarter or half a
percent by mid-next year. So it looks like interest rates
that you're paying for your mortgage or you're receiving for
your term deposits or cash in the bank will go up.
Not always good news for people. The good news is
that inflation should be back under control mid to late
(01:47):
next year. And we'll probably see interest rates maybe ease
a little bit then.
Speaker 2 (01:52):
It sounds as though if fuel wasn't doing what it's
been doing for the past six months, inflation would have
been OK.
Speaker 3 (01:58):
Yeah, I believe so. Fuel has driven a lot of inflation.
So if you think about your block of cheese at
the supermarket, the cost to get that to the supermarket
has probably gone up with fuel. everyone else, the packaging,
the plastics comes from fuel. So there have been a
whole lot of small incremental steps to other products outside
(02:19):
of the actual fuel cost.
Speaker 2 (02:21):
Quite a bit there to entail, I suppose. So just
the nature of the game at the moment. Interest rates, though,
do we need to be positive about where this is
going to be over the next 18, 24 months?
Speaker 3 (02:31):
I don't think there's any reason to be unhappy. So
interest rates are roughly where they were from 2010 to 2020.
They might be going up a little bit, and I
mean sort of quarter of a percent or half a
percent over the next year. That shouldn't be dire for
most people. And if anything, they might start easing back
again then. So it's not like we saw three or
(02:54):
four years ago when interest rates really shot up and
made things uncomfortable.
Speaker 2 (02:58):
So it's actually found a bit more of a happy
medium since then? I believe so.
Speaker 3 (03:03):
And I think our economy's got a reasonably good track
at the moment. It's more positive. We've come out of
a really tough time. The government's done its best. Businesses,
particularly down here, are doing quite well. So I think
there's room for improvement and people should be positive in general.
Speaker 2 (03:24):
You won't find a more prosperous province in Southland at
the moment?
Speaker 1 (03:27):
No.
Speaker 2 (03:27):
As far as money, as far as growth?
Speaker 3 (03:29):
I think it's fantastic down here, yeah. Worlds apart from
Auckland or Wellington, we've got a positive vibe. Spring's coming,
the sun's shining. Lambs are jumping around. It's a good
place to be.
Speaker 2 (03:40):
And gumdrop buttons will be falling from the sky when
we get seven days of blue skies, David. Here's one
to ponder as well. The election coming up, possible change
in government. What changes there as far as the money
side of things? Because new government, new thinking, if that occurs.
Speaker 1 (04:00):
Yes.
Speaker 3 (04:00):
Well, the polls have been all over the show. We
spoke about that earlier. It could be on a knife
edge or it could fall blue.
Speaker 2 (04:08):
Could fall red.
Speaker 3 (04:09):
Coalitions still have to be formed after the election, which
could be the juicy part. If it falls to the
red side, there will be a change in enthusiasm from
the investment markets, primarily because of the taxes and the
change of direction for the economy. Now, the new taxes
aren't necessarily bad in themselves, but how they roll out
(04:31):
and how people deal with them could be quite different
from how they're planned. So there's a lot of uncertainty
if the books flip to red. And then we could
see people a bit more nervous to invest in not
just the financial markets here, but also into their businesses,
into their households. They might sit on their hands for
(04:51):
a while before they do anything. So that could be
a bit of a hindrance to our economy in general.
Speaker 2 (04:57):
Investor sentiment at the moment, how would you rate it?
Speaker 3 (05:01):
It's surprisingly good. So the markets out there have had
a really good run. Investors are getting really good returns.
You wouldn't always think it turning on the news because
we love to sort of dwell on the negatives.
Speaker 2 (05:17):
Okay, diversification regarding portfolios at the moment. We've talked about
this with you guys quite a bit in the past.
What's the thinking?
Speaker 3 (05:25):
Well, it's been tough for New Zealand investors over the
last five years. New Zealand companies haven't really flourished. We've
seen some do really well, but you've had to be
lucky if you had all your money in those. If
there's a change in government, I do worry about our
economy because there will be so much uncertainty about how
(05:45):
things will play out. So we're fortunate that with our clients,
we've been able to diversify overseas where we have a
large degree of expertise and access. And it's really the
overseas markets that has helped our investors get good returns.
So diversifying is a great thing.
Speaker 2 (06:03):
Okay, what's an example of somebody diversifying overseas with their portfolios?
Speaker 3 (06:07):
Well, if you walked in the door with a reasonably
sized cheque, you might find that half of it ends
up overseas. Now, to the typical Kiwi, they think, oh,
that's a bit scary. We don't know what's overseas. But
if you think about some of the big names, the Apples,
the Googles, Microsoft's, they've done really well. They've had a
(06:28):
good run. And it's really been those sort of names
that have lifted investor returns and made people happy with
their investment returns over the last year or two.
Speaker 2 (06:38):
The technology sector is the saying that I'm after. It's
been pretty buoyant. It has been, which is great. And
we can also temper people's investment into that sector. So
another worry is what happens if the tech sector bowls
over and share prices fall, well, we take care of
that with diversifying. We mitigate some of that risk, manage
(07:00):
it for people. Craig's Investment Partners, where do they get
in touch?
Speaker 3 (07:05):
Just walk in the front door at 1 Erk Street
opposite Gore New World.
Speaker 2 (07:08):
Get the groceries, then go and sort your portfolios.
Speaker 3 (07:11):
Yeah, yeah, or vice versa.
Speaker 2 (07:13):
Good on you, David. Great. David Frame of Craig's Investment
Partners based here in Gore. Just on that fuel price, remember,
it is saving at the pump day. Generally on a
Thursday here in Gore, it's like be up to 18 cents,
even 20 cents off. So do your due diligence, Gatsby.
There's a tip for the day. Jarrod Stockman's up next
(07:33):
out of Dairy NZ.
A muster financial segment with Craig's investment partners in Gore.
This information is general in nature and is not financial advice.
Craig's investment partners limited financial advice provider disclosure statement can
be found at craigsip.com.
Speaker 2 (00:17):
David Frame of Craig's Investment Partners joins us once again
on this hump day.
Speaker 3 (00:22):
G'day, David. G'day, Andy.
Speaker 2 (00:24):
How's it going? Pretty good.
Speaker 1 (00:25):
Good.
Speaker 2 (00:26):
Excellent. A dry day or two makes a bit of
a change to the mood after what we've endured.
Speaker 3 (00:31):
Yes, I'd love to see a few more sunny days
out there and for the paddocks to dry off. Ours
are shocking at the moment.
Speaker 2 (00:38):
How much land you got?
Speaker 3 (00:39):
We've got nine acres. It's enough for a townie.
Speaker 2 (00:42):
What are you running on? Come on, what stock units?
Speaker 3 (00:44):
Oh, the neighbour's sheep, but he's taken them back for lambing,
so we'll just wait and hopefully the grass grows for
some baleage.
Speaker 2 (00:51):
It'll happen. It'll happen at Southland. Interest rates, big talk
at the moment, a lot of talk around them with
the OCR rising last week and the flow-on effect. Plenty
to talk about in that respect.
Speaker 3 (01:03):
Yes, the OCR raised last week to 2.5%, actually 2.75%,
but it lifted in July. So interest rates are on
the move. Inflation's a lot higher than was forecast, and
that's mainly because fuel prices have stayed high because of
the whole debacle in the Middle East. It looks as
(01:24):
though interest rates might rise another quarter or half a
percent by mid-next year. So it looks like interest rates
that you're paying for your mortgage or you're receiving for
your term deposits or cash in the bank will go up.
Not always good news for people. The good news is
that inflation should be back under control mid to late
(01:47):
next year. And we'll probably see interest rates maybe ease
a little bit then.
Speaker 2 (01:52):
It sounds as though if fuel wasn't doing what it's
been doing for the past six months, inflation would have
been OK.
Speaker 3 (01:58):
Yeah, I believe so. Fuel has driven a lot of inflation.
So if you think about your block of cheese at
the supermarket, the cost to get that to the supermarket
has probably gone up with fuel. everyone else, the packaging,
the plastics comes from fuel. So there have been a
whole lot of small incremental steps to other products outside
(02:19):
of the actual fuel cost.
Speaker 2 (02:21):
Quite a bit there to entail, I suppose. So just
the nature of the game at the moment. Interest rates, though,
do we need to be positive about where this is
going to be over the next 18, 24 months?
Speaker 3 (02:31):
I don't think there's any reason to be unhappy. So
interest rates are roughly where they were from 2010 to 2020.
They might be going up a little bit, and I
mean sort of quarter of a percent or half a
percent over the next year. That shouldn't be dire for
most people. And if anything, they might start easing back
again then. So it's not like we saw three or
(02:54):
four years ago when interest rates really shot up and
made things uncomfortable.
Speaker 2 (02:58):
So it's actually found a bit more of a happy
medium since then? I believe so.
Speaker 3 (03:03):
And I think our economy's got a reasonably good track
at the moment. It's more positive. We've come out of
a really tough time. The government's done its best. Businesses,
particularly down here, are doing quite well. So I think
there's room for improvement and people should be positive in general.
Speaker 2 (03:24):
You won't find a more prosperous province in Southland at
the moment?
Speaker 1 (03:27):
No.
Speaker 2 (03:27):
As far as money, as far as growth?
Speaker 3 (03:29):
I think it's fantastic down here, yeah. Worlds apart from
Auckland or Wellington, we've got a positive vibe. Spring's coming,
the sun's shining. Lambs are jumping around. It's a good
place to be.
Speaker 2 (03:40):
And gumdrop buttons will be falling from the sky when
we get seven days of blue skies, David. Here's one
to ponder as well. The election coming up, possible change
in government. What changes there as far as the money
side of things? Because new government, new thinking, if that occurs.
Speaker 1 (04:00):
Yes.
Speaker 3 (04:00):
Well, the polls have been all over the show. We
spoke about that earlier. It could be on a knife
edge or it could fall blue.
Speaker 2 (04:08):
Could fall red.
Speaker 3 (04:09):
Coalitions still have to be formed after the election, which
could be the juicy part. If it falls to the
red side, there will be a change in enthusiasm from
the investment markets, primarily because of the taxes and the
change of direction for the economy. Now, the new taxes
aren't necessarily bad in themselves, but how they roll out
(04:31):
and how people deal with them could be quite different
from how they're planned. So there's a lot of uncertainty
if the books flip to red. And then we could
see people a bit more nervous to invest in not
just the financial markets here, but also into their businesses,
into their households. They might sit on their hands for
(04:51):
a while before they do anything. So that could be
a bit of a hindrance to our economy in general.
Speaker 2 (04:57):
Investor sentiment at the moment, how would you rate it?
Speaker 3 (05:01):
It's surprisingly good. So the markets out there have had
a really good run. Investors are getting really good returns.
You wouldn't always think it turning on the news because
we love to sort of dwell on the negatives.
Speaker 2 (05:17):
Okay, diversification regarding portfolios at the moment. We've talked about
this with you guys quite a bit in the past.
What's the thinking?
Speaker 3 (05:25):
Well, it's been tough for New Zealand investors over the
last five years. New Zealand companies haven't really flourished. We've
seen some do really well, but you've had to be
lucky if you had all your money in those. If
there's a change in government, I do worry about our
economy because there will be so much uncertainty about how
(05:45):
things will play out. So we're fortunate that with our clients,
we've been able to diversify overseas where we have a
large degree of expertise and access. And it's really the
overseas markets that has helped our investors get good returns.
So diversifying is a great thing.
Speaker 2 (06:03):
Okay, what's an example of somebody diversifying overseas with their portfolios?
Speaker 3 (06:07):
Well, if you walked in the door with a reasonably
sized cheque, you might find that half of it ends
up overseas. Now, to the typical Kiwi, they think, oh,
that's a bit scary. We don't know what's overseas. But
if you think about some of the big names, the Apples,
the Googles, Microsoft's, they've done really well. They've had a
(06:28):
good run. And it's really been those sort of names
that have lifted investor returns and made people happy with
their investment returns over the last year or two.
Speaker 2 (06:38):
The technology sector is the saying that I'm after. It's
been pretty buoyant. It has been, which is great. And
we can also temper people's investment into that sector. So
another worry is what happens if the tech sector bowls
over and share prices fall, well, we take care of
that with diversifying. We mitigate some of that risk, manage
(07:00):
it for people. Craig's Investment Partners, where do they get
in touch?
Speaker 3 (07:05):
Just walk in the front door at 1 Erk Street
opposite Gore New World.
Speaker 2 (07:08):
Get the groceries, then go and sort your portfolios.
Speaker 3 (07:11):
Yeah, yeah, or vice versa.
Speaker 2 (07:13):
Good on you, David. Great. David Frame of Craig's Investment
Partners based here in Gore. Just on that fuel price, remember,
it is saving at the pump day. Generally on a
Thursday here in Gore, it's like be up to 18 cents,
even 20 cents off. So do your due diligence, Gatsby.
There's a tip for the day. Jarrod Stockman's up next
(07:33):
out of Dairy NZ.
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