As we welcome the longer days and warmer weather, it's a good time to reflect on how markets have performed over the past quarter – and what it all might mean for your financial plan.

Share Markets March Ahead

Global share markets continued their steady climb through the third quarter of 2025. This upward trend was largely fuelled by:

• Optimism around interest rate cuts by major central banks,
• Excitement about artificial intelligence (AI) and related tech companies,
• And some political and regulatory headlines that briefly unsettled markets.

Notably, the US Federal Reserve kicked off its rate-cutting cycle with a 0.25% reduction, giving bond markets a lift. Meanwhile, tech giants like Nvidia and Alphabet (Google’s parent) led the charge in US share performance.

A Gentle Reminder About ‘Recency Bias’

With so much media focus on big-name US companies, it’s easy to think they’re the only investment story in town. But this can lead to something called recency bias — where we assume recent trends (like strong tech returns) will keep going indefinitely.

It’s a helpful time to remember that over longer periods, smaller companies in the US have often delivered stronger returns than their larger counterparts. The lesson? Keep a long-term, diversified perspective.

NZ Outlook: Some Tailwinds Ahead

Here at home, the Reserve Bank of New Zealand made two significant rate cuts this quarter, bringing the Official Cash Rate down to 2.5%. This is the lowest it’s been in more than three years, and it’s a move designed to support our slowing economy.

While economic growth has been patchy — especially following COVID disruptions and high inflation — these lower rates are expected to support borrowing, business activity and, in time, job creation.

Tariffs & Trade Tensions: What to Watch

One of the key international developments is the US government’s evolving tariff policy. These trade taxes are aimed at protecting US industries but can also drive up costs and impact global supply chains.

With legal challenges now underway in the US Supreme Court, we’ll be watching closely. While these decisions may feel far away, they can influence New Zealand businesses and markets in subtle but important ways.

Safe Haven Assets: Pros & Pitfalls

Assets like gold, cash and US Treasury bonds often attract attention during times of market uncertainty. They’re called "safe havens" because they tend to hold their value when share markets wobble.

But here’s the catch: timing entry and exit from these assets can be tricky. It’s often better to ride through market storms with a well-diversified portfolio than to switch out in a panic — and miss the recovery.

Standout Performers This Quarter

• Emerging Markets led the pack with a +16.6% gain, thanks to strong performances in China, South Korea, and Latin America.
• International Shares returned +7.5% (hedged to NZD), driven by tech strength and progress in US trade deals.
• New Zealand Shares were up +5.8%, with smaller companies performing especially well.
• Bonds also delivered modest gains, helped by falling interest rates in NZ and the US.

Final Thoughts: Staying the Course

Over the past 20 years, global shares have risen in more than 75% of all quarters, delivering nearly 10% annually despite global crises, recessions, and political upheaval. It’s a powerful reminder of the rewards for those who stay the course.

Yes, unexpected events will keep happening. But sticking with a clear, evidence-based financial plan — and avoiding emotional decisions — remains the best approach.

Need Help Navigating Your Plan?

If you’re wondering how recent market changes affect your investment strategy or retirement planning, we’re here to help. The team at Central Financial Planning — Brent Wilson, Dewald de Beer and Scott Sinclair — are just a phone call or email away.

Let’s keep your plan on track, together.

Call: 03 448 8613

Email: [email protected]