Reality Bites

Few of Australia’s financial advisers believe domestic or international share markets will see an improved performance in the second quarter of 2008 after a tumultuous start to the year.

With investment funds, super funds and some investors bracing for the reality of negative returns for the 2007-2008 financial year, advisers are not expecting a dramatic rebound in the April-June quarter.

As of today the All Ordinaries is down some 19.6% since the start of the quarter (January 1), while the Dow Jones is off a whopping 22.9% since the beginning of the year.

Yet advisers are not expecting a return to the hay-making days of the past few years any time soon.

Only 6.9% and 3.4% of advisers believe the Australian and international share markets will perform ‘much better’ in the financial quarter of the financial year, according to the latest CoreData Quarterly Adviser Sentiment Report.

The majority of planners do not however see a major deterioration in the present environment, with 41.3% and 32.1% anticipating markets will perform ‘somewhat better’ locally and abroad over the next three months.

Almost 1 in 3 of Australia’s financial planners expect no improvement or deterioration with 29.2% and 31.2%.

In terms of outlook for the economy advisers are almost perfectly balanced in their outlook, with 50.5% expecting things to neither worsen or improve.

Meanwhile one in five (20.5%) believe things will get ‘somewhat better’ while the same number (20.7%) think the situation for the domestic economy will become ‘somewhat worse’.

Hardly any advisers sat at the extreme, with only 0.7% expecting a major improvement and 0.4% expecting a dramtic fall off.