John Billington
Viewpoint with John Billington

by John Billington
General Manager
IOOF Portfolio Solutions

Welcome to the March Edition of @dviser Magazine.

It’s good to see traces of green replacing red on the market tickers recently.

There are probably still stormy waters ahead, but it makes a welcome break from the media’s sensationalist doom and gloom.

Unfortunately that didn’t last very long. Economists from the Westpac–Melbourne Institute produced a negative outlook for the Aussie economy and the catastrophe headlines were blaring again.

Economists and their prophesies

Is it really bad news? Well it could turn out to be, but it’s just a forecast not a fact.

Ironically it could be a very positive sign.

That’s because economists are wrong so often that believing the opposite of their predictions is not such a bad idea.

I’m not just being cynical either. According to The Wall Street Journal Survey of Economists from December 1982 to June 2008, economists’ forecasts on the direction of US interest rates were wrong in 35 of the 52 periods – 67 per cent of the time!

A child could do better than that tossing a coin.

Heads or tails on interest rates?

It doesn’t instil much confidence in any economic prophesising, but predictions are futile at the best of times (let alone now).

We should really just stay focussed on what we can control.

Our clients for example, have control over how they invest. We can help them create well-diversified portfolios appropriate for their time horizon, objectives and financial situation.

After that, there is nothing more that we (or our clients) can do.

Sure they should stay well-informed and think long term, but there’s no point wasting time and energy focussing on unknowables. Especially the things economists see in their crystal balls.

Exciting times for IOOF

In other news, it’s been an exciting and historic month for IOOF.

At the beginning of March we announced that IOOF had purchased Skandia and Intech (Old Mutual Australia).

It was great to have the announcement met with so much positive and encouraging support from advisers, clients, staff and the media - so thanks to everybody who wrote or called in. These really are very exciting times for our business and we all believe this purchase is a fantastic result for IOOF, Skandia and Intech Investments.

I’m pleased to report that the early stages of integrating the businesses are going exceptionally well. There is of course lots of work to be completed but we are on track for a smooth and productive transition.

I hope you enjoy this edition of @dviser Magazine. If you have any comments or queries please contact your Business Development Manager, call Adviser Services on 1800 659 634 or simply email me directly.

John Billington