MLC Market Watch

In this editorial, MLC CEO Steve Tucker talks about the dangers of moving investments out of the sharemarket and into cash products:

Late last year it was hard to avoid the media frenzy around the Federal Government’s guarantee on cash products and I observed the commentary with disbelief. The public debate was fixated on which companies would offer government-guaranteed products, which ones would pass on the cost of the guarantee to customers and whether or not customers could get access to the guarantee for free if they split their money among several different accounts.

However, no-one seemed to ask the most important question, which is: beyond bringing Australia into line with actions taken by governments around the world, what value was there for a customer with more than $1 million who would pay an additional 70 basis points for the guarantee on a low-risk, low-return cash product? The Government did not introduce the guarantee because it was worried about the stability or security of Australia’s banking system, which is strong and performing well. Cash products have operated effectively in Australia for decades and there is no reason why this would not continue. Unfortunately, these vital facts were missing from much of the public discussion around this issue, which seemed to be stuck at a product level rather than being focused on whether or not chasing the guarantee made sense.

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It’s been a challenging year. And as 2008 comes to an end, you may well be wondering what 2009 has in store for us all.

With this in mind, MLC CEO Steve Tucker has recorded an end of year message [Video, 3:44min], giving his analysis of 2008 and his views on the coming year.

Stay tuned next year for lots more online discussions, webcasts and articles on Market Watch.

And remember, you can subscribe for updates to stay informed without having to visit the site each day.

The MLC Market Watch Team look forward to talking with you in 2009 and would like to wish you and your loved ones a relaxing and enjoyable holiday season.

On Wednesday 29 October, MLC’s CEO Steve Tucker appeared on Peter Switzer’s Money Makers program with Anton Tagliaferro from Investors Mutual.

He talked about:

• Market cycles – what investors should do given the events of the past 12 months.
• The flight to cash – is it the right thing for investors to be doing?
• Economic outlook for the global and Australian economies
• The importance of diversification

View the video clip [VIDEO, 38.05MB]

With the high profile financial institution collapses we have seen in recent months, some of our customers have questioned how safe their investments are.

Ahmed Fahour, Executive Director and CEO, Australia said, “NAB’s wealth management business, MLC, is performing well in a very difficult environment and customers should have comfort that their investments are both safe and being managed prudently.”

Additionally, Steve Tucker, CEO of MLC, said, “MLC has been a successful Australian business for more than 120 years. Our customers should have confidence that their investments are well diversified and are being carefully managed in these turbulent times.”

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