Speaker 1: 0:05

Welcome to Finance Friends with Fabian, where we give our listeners an opportunity to be a part of our conversation with financial services industry leaders, hear their stories, the challenges they've overcome and the invaluable advice they have for anyone interested in the financial world. Keep up to date with us by following Finance Friends podcast on Instagram and TikTok. Welcome to Finance Friends with Fabian podcast. And today we have Diana Mussina, the Deputy Economist at AMP. Sorry, deputy Chief Economist, is that right? That's right. Well, welcome. How are you?

Speaker 2: 0:41

today. Thank you, fabian. Thanks for having me on, I'm good.

Speaker 1: 0:43

That's good and well. You've achieved so much already in your career, so it'd be good to maybe take us back to the beginning. So you did a finance degree finance, accounting and economics at uni. Is that right?

Speaker 2: 0:58

I did commerce and economics at the University of New South Wales, so it was a double degree that was offered. I'm not sure if it's still offered anymore, but it was actually one of the only unis that offered that combination. I really loved economics in high school but I thought that commerce was sort of a bit better for the working life because I wasn't like a lot of people. Probably I didn't really know, you know what what economists did, if I could really be an economist, what actually involved. I just knew that I really liked it, so it was a good. It was a four-year degree. It was a really good sort of. It gave me a really good understanding of both the financial aspects of things, but then also my love for economics.

Speaker 1: 1:37

Yep. So where did the love for economics start? Like what made you decide to study economics in year 11,?

Speaker 2: 1:43

I assume yeah to be honest, I'm not actually sure I did, I just think I took a natural liking to it. I mean I always liked maths, but I wouldn't say I was like a gun at maths or anything. I mean my extension maths teacher would probably tell you that you know I still had a lot of trouble with maths. I wouldn't say I was very natural at it, but I really liked it and I worked quite hard at it. And I did business studies as well.

Speaker 2: 2:11

We did have in year 9 and 10 we had like an additional subject. It was a I can't remember what it was called, but it was basically some sort of like commercey type of subject about like how businesses work, about how the world works, and I thought that would sort of be a very natural step towards economics. So I think I always just really enjoyed trying to figure out how things work in terms of how industries and businesses fit into the world, and it was just quite natural for me. I wasn't particularly good at science, sort of everyone in my family is a scientist, basically, except for me. I just was never good at science. Everyone in my family is a scientist, basically, except for me. I just was never good at it, so I just thought that it was just something that I was naturally gifted at.

Speaker 1: 2:52

Yeah, so then from there you studied and you finished your degree double degree, was it, or just? A double degree and then you joined CBA as a graduate program. That's right, yeah, so tell me a bit about that? What did you as part of the rotations? What did you do at CBA?

Speaker 2: 3:10

So when I was in my last year of uni, like a lot of people, I basically applied to a lot of different internship programs. I applied for everything I could find any entry level, any graduate programs and I got a few interviews and CBA was one of them and the interview process I felt it was. I just felt like it was a really good fit. So when they offered me the role I instantly said yes. So it was in the Institutional Banking and Markets Program, which looks a little bit different now at CBA, but basically there were rotations offered in like the consumer side, so the actual consumer, the institutional banking side, but from like the consumer point of view or the business point of view, I did a rotation in the equities research team which doesn't exist anymore.

Speaker 2: 3:58

but then I did a rotation in client relationships and I can't remember where I did my last rotation now it's been so long ago. But yeah, you know the whole. The experience was really good. It was a year and I got to learn different parts of the business, and when I did the equities research rotation, that was how I started to get to know the economists and the economics team, and so I basically lined up a rotation for myself in the economics team and that was actually my last rotation, of course.

Speaker 3: 4:32

Well, that makes sense.

Speaker 2: 4:34

But yeah, I lined that one up because they hadn't had a. I don't think that they had had a graduate for a long time in that team if ever. They hadn't ever had a female graduate in that team not for many, many years, so it was quite fresh for them. But ever since then I think that they've had many, many more graduates in that team.

Speaker 1: 4:52

So when you talk about institutional banking and markets, let's touch on the research piece. So what were you doing? Were you researching individual companies? Yeah, Were you supporting a senior research analyst and took me through what was I don't know? It was a few years ago. Yeah, it took me through that process because we have had some portfolio managers on before and seen you got an early start to that, but you decided to go down the economics route or becoming an economist, and, keeney, what did you do and what did you enjoy about that?

Speaker 1: 5:20

And then maybe let's touch on also the economist part and what made you go down that pathway.

Speaker 2: 5:27

So that part of the business doesn't exist anymore at CBA, but it's basically the equities research division that you would have at an investment bank. So there were different analysts that would cover different stocks. I was in the small caps team at the time when I was rotating that. That was my first rotation and you would be looking at a company bottom up. You would be meeting with management, cfos and CEOs trying to figure out the company's balance sheet, their income statement, their cash flow statement, basically trying to give a target for the cash price so that the clients could either buy or sell or hold that particular stock. So we had that equities capability as well. That was actually doing the trading of those equities. So my role as a graduate would be to help build up those spreadsheets, put in the numbers when reporting season came out, but I don't really know why I?

Speaker 2: 6:17

didn't love it. I just don't think I fit in to that style, to that analyst sort of role that you normally. I think it did have a very sort of old school analyst, investment banking type of attitude in the division. I just didn't really fit into it. But when I met the economics team I instantly loved the work. I wasn't really interested in trying to understand how a company worked and looking at balance sheets and cash flow statements and looking at that bottom-up. I love doing bottom-up analysis of the economy but it's quite macro when you're thinking about what an economist does in that type of role, rather than trying to forecast individual business investment components of that particular company.

Speaker 2: 7:04

It's quite specific and I think I always like the broader picture.

Speaker 1: 7:10

Yeah, in Australia and maybe this is changing. But from when I my experience working in financial advice and wealth management, we are very much bottom-up focused and stock specific and I think globally it's more you know top-down and macro focus. I think that is evolving in Australia. But yeah, it's interesting, you say that and so, and then you moved into, you know, working. So you finished your graduate and so then you moved into working. So you finished your graduate program and then you started working as an economist. Was that your title at CBA?

Speaker 2: 7:42

Yeah, it was. It was economist, I think. There were lots of different layers, but I'm pretty sure it was economist and I worked in the economics team for about four years afterwards, yeah. And then the opportunity came up at AMP so I moved over to the funds management side because the CBA economic side was sell-side research. So, being a macroeconomist, but sell-side.

Speaker 2: 8:05

When you say sell-side, basically it means that you are competing with other economists to sort of sell your views to the market. So you would try and be, you know, the person that people would listen to, both from a brand point of view, but then also you know to want to do deals with CBA or trade with CBA or using CBA, basically as, like your trading partner, I would sit on. The economics team used to sit on the trading floor, so on market, so we would be around people making decisions on currency spot desk, the commercial desk. It was a very fast-paced environment and it looks quite different now, I think, because of some of the regulations that have evolved in markets and also with research and MIFID rules and all those types of things. So actually the economics team don't even sit on the market's trading floor anymore. They're sort of in their own bubble, research bubble.

Speaker 2: 8:59

But then I moved into AMP. I wanted to get exposure to the fund side or the buy side. Basically it means that you are the asset owner ultimately and you're making decisions about where to invest different assets. So I guess economists still definitely have some sort of sell side involvement, even if you are working for an asset owner like AMP Capital, where I went after CBA. Or you know if you are working for a foreign asset owner like like amp capital, where I I went after cba. Or you know if you'd like an australian super or something like that. Um, there is obviously that sell side trying to get people to listen to your views, having that, having that brand involvement but it's a little bit different to a cba sell side economics type of yeah, and I guess for our listeners they're the key difference, the way I like to see it, for buy-side versus sell-side.

Speaker 1: 9:47

Buy-side you're using your research for internally investing, whereas sell-side, that research is used for external, to try and engage the external market to use your services.

Speaker 2: 9:56

Yeah, basically. I mean, I think with economics you still obviously have, you're still competing with other economists, so the lines are a bit more blurred between buy side and sell side, but I think that's a good way to describe it.

Speaker 1: 10:08

Yeah, and when you talk about working as an economist, let's go back to when you first started, maybe working as a full-time economist after you finished your rotations as a graduate. What work is involved? Like you know, we see. You know headline, you know it might be. A&p predicts that interest rates. The RBA drops interest rates by, you know, three times before the end of 2025. So what are you actually doing? What research are you doing? Just talk us through the basic. What are some key macros that you look at? I assume unemployment, you know forecasting interest rates, would it be GDP growth, population growth? Can you talk us through that please?

Speaker 2: 10:49

The beginning was really overwhelming because I know, while I thought I was pretty good at economics, it was very different to have the theoretical economic knowledge to applying that. I didn't really have a good understanding of the history of the different indicators that we were looking at, so the beginning was very hard. When I started, the main things I was doing would be things like updating spreadsheets. So when we got data releases, you know, updating all our spreadsheets with the different data. And times have changed since then. Because of technology it's a lot easier now to update data. But back then it was a bit more manual yeah, updating charts that went alongside with that data and then trying to get an understanding of the historical movements of what had happened so I could basically write a research note. So that was the aim that after a few months of working on the data and updating things and looking at I wasn't involved in forecasting.

Speaker 2: 11:42

Back then Our chief economist was doing all of that. But once I sort of got my handle around understanding how the data moves and what the different components are, because there are hundreds of spreadsheets and when you look at the ABS website there is 10, 20, 30 different spreadsheets for each indicator. So you really have to understand each spreadsheet in quite a lot of detail, you know. Are you looking at seasonally adjusted original trend data? What are the analytical calculations that you're doing on them? Are you doing a month percentage change? Are you doing a year percentage change, three-month annualized? Are you looking? Are you summing things up? So that was the beginning, just trying to understand the data and how it moved before then eventually, in a few months, writing research notes, which was quite overwhelming. There were a lot of red marks by my managers about the types of things I was writing about, because they didn't make sense, obviously, which was fine. I was still trying to figure my way around it, but that's how sort of the role evolved.

Speaker 1: 12:43

And what have you most enjoyed about working as an economist and how has it evolved to you know being the deputy chief economist at AMP from graduate, I imagine you're still looking at the same research, same indicators, but now it's more actually looking forward and forecasting rather than just looking at you know past data. Is that right?

Speaker 2: 13:09

I think the thing I've most enjoyed is understanding the current position of the economy and where we're at and then trying to explain to people where we're going. The interesting thing about being an economist is in a lot of other roles you might you know you could be a manager and actually have less experience than someone in your team. So you could be, for example, 30 years old and have people who are 50 years old reporting to you. But with something like economics or even portfolio management, the more time you've had in the market, the more experience you've had through. That time in the market gives you more seniority and more clout because you've seen the cycles, and that's what's really important to see the cycles in economics, seeing periods where you've had high inflation, low inflation, high growth, low growth, different government policies. That's actually what matters because it helps you to understand where we're going in the future.

Speaker 2: 14:07

If you sort of understood the past and how that's impacted the data and that, I think, is what's been interesting is having now that background knowledge of how things have evolved in Australia to give people some understanding of where we're actually going into the future and in terms of how the role is involved. Absolutely Now it's more around. Well, one explaining to people where we're going and two forecasting. That's really the biggest part of my role is just to be right on GDP, inflation, interest rates. If you can get those three right.

Speaker 3: 14:42

Yeah.

Speaker 2: 14:43

And share markets, of course.

Speaker 1: 14:45

Yeah, of course, which all lead into one which is ultimately investing. So maybe can you share, I guess, an opportunity, a learning opportunity that you've had where you've put a forecast out whether it be interest rates, property prices, gdp growth, share markets where you have been incorrect, and I know it's a forecast of GDP growth, share markets. Where you have been incorrect, and I know it's a forecast of you know things change at that point in time based on information you have available. That's the forecast you made, but has there been a time that you can recall where you've made a forecast which has been a bit off, and have you been able to learn from that experience?

Speaker 2: 15:22

So when we do our like, do our biggest forecasts that go into like, we send them through the RBA, we send them to Bloomberg, to Reuters. They are a team forecast so they would all get confirmed by my boss, our chief economist, so I guess I can't say that. You know, it's been my call. It is always a team or an AMP view. So, just keeping that in mind, we probably have been in the two most recent periods where I think we read the market wrong.

Speaker 2: 15:54

One was during the pandemic, when we I mean the pandemic was obviously sort of a very difficult time to be in a context, because we're changing our views all the time based on new announcements from the government and changes in health policies and what COVID-19 is actually doing. But we had quite a negative view on the housing market, so we thought that home prices, like a lot of people, would fall by 15% in Australia based on the weakness in GDP growth and the uncertainty that we had a high unemployment rate. So, yeah, we had quite a negative view on the housing market at the time and what we underestimated was the government policy around immigration and I suppose we didn't really have much clarity as to what the government was. And this was, I guess, like after the pandemic not really during it.

Speaker 2: 16:43

So our view was that property price growth would be quite weak into the hiking cycle after the pandemic and we just underestimated how fast immigration would come back after COVID-19 and that there would be so much catch-up and that would basically be the main reason for why home price growth was still so robust and so strong in the period after COVID-19. That was probably one of the biggest misses that we've had recently, because we were quite wrong on that and it was driven by policy, which just shows you how important some government policies can be to determining economic outcomes. And then I guess part of that as well we were quite early to say that the RBA should be cutting rates. We've been saying the RBA cut rates in February. We had been saying that they should be cutting rates since about the middle of last year, so we were early to say that, but at the same time we were probably too early.

Speaker 1: 17:45

So I guess you might make the right call, but timing can affect how correct that call is.

Speaker 2: 17:51

And I guess some people would say, like the other thing that you have to think about as an economist is you know who's more right someone that says it first but is too early, or someone that has the right date about it but says it later. So if someone was like we were saying that the RBA should have cut in November last year and we were ahead of the market in saying that, but someone who called the February meeting right but just did it later than us, are they more right than us?

Speaker 1: 18:18

Yeah, and also the question is what makes you think the RBA is right, because the RBA don't always get it correct either.

Speaker 2: 18:23

They don't, and I guess that's also why I think when people say this is the best economic forecaster, this is the person that's got everything right. It's always in flux. It's always changing. What I think is important is getting the peaks and the troughs in the cycle and trying to figure out when things are going to turn. That, to me, is most important.

Speaker 1: 18:43

Yeah, no. Thank you for sharing that. What do you believe are the two or three most important skills to be successful in your position?

Speaker 2: 18:55

Communication, yeah, but you can learn that because I wasn't good at doing media when I first started or talking to clients, but you sort of just figure that out. Confidence is really important Again, something that you learn. I was not confident at all when I first started out, but you sort of pick that up with more experience and you do have to be analytical. I mean, if you're not interested in looking at data and manipulating not manipulating, but you know, playing around with data and trying to, you know, find new ways of looking at things like whether it's an indexation or percentage changes, whatever it is we deal with a lot of data. So if you're not interested in data, it's not the right type of job for you.

Speaker 1: 19:40

So understanding and being able to interpret it and also communicate it with confidence yeah, that's right. At what point? Obviously you've been an AMP deputy chief economist, which is pretty impressive because you're quite young in your career, it's fair to say.

Speaker 2: 19:55

I'm young. I'm younger than I look. Sorry, sorry, I'm older than I look. That's what I meant.

Speaker 1: 20:01

Well, I don't know about that, and you've obviously learned a lot and come a long way. So what advice would you give if you know, looking back at you as a 20-year-old or 22-year-old and I did see that you did I- was just thinking about that I was literally just thinking about that. But if someone is a 22-year-old and there's not many women in financial services and there's not many senior economists female, economists, there's a lot more now than there used to be.

Speaker 1: 20:29

And it has evolved and I think I can think of a couple at the moment. But what advice would you give and I don't want to be female specific, but obviously our industry within financial services is probably 70% males and 30% females what advice would you give to someone that might be studying a commerce degree? Or someone that's in year 11 and studying economics? What advice would you give them at the start? Or what advice would you give yourself as a 17-year-old?

Speaker 2: 20:58

For me. I wished that I was more on top of what was going on at the time when I was studying economics in the actual economics world. So I wish that I was more across what the Economist was writing about. And I did try to read the Economist a little bit. But, to be honest, the way that the Economist writes, I think you have to know what's going on to be able to read it. Like they don't write in a way that's just clear for people to understand and economists can use a lot of jargon. So I hope that in the way that we write, or the way that I write, is able to be read by anyone.

Speaker 2: 21:32

If you're an advisor, you can read it, and that's most of our clients. If you're a uni student, you could read it. If you're a high school student, you could read it and understand it. If you're a portfolio manager, it will still be interesting to you. There are obviously some things like some more technical things that might be more suited to some specific people, but I think just reading a lot about what's going on at the time. So the Fin, the Economist, our publications.

Speaker 1: 21:58

Yeah, well, let's talk about your podcast, because you do have a podcast, we do, yeah, which is very popular. So what's the name of your podcast?

Speaker 2: 22:04

The podcast is called Simplifying Investing and it's with Shane Oliver myself. Shane Oliver, our chief economist, then there's me and then there's another girl called Me Boy, so it can be confusing me and me. So there's three of us in our team and we sort of share the podcast around and we just talk about what's going on in markets, what we think is important in economics and sort of more of like an educational explainer, sometimes at the end about you know, if people talk about a recession, what does a recession actually mean? Or, like tariffs, what is a tariff?

Speaker 1: 22:35

how is it actually implemented? That sort of thing Very topical at the moment tariffs with Mr Trump, or maybe just Mr Tariff man. Yeah, or maybe just a negotiation tool, so, and our listeners can also listen to your podcast through, I assume, the main stream. Yeah, the main channels, yeah, and then you also do some writing publications.

Speaker 2: 22:55

So you can talk to me about that as well. So our publications I mean they're meant for media and our clients, but we do publish some things. Actually, all of our publications are available on the AMP website. So Shane publishes Oliver's Insights, I publish Econocytes. Some of them we publish on our LinkedIn as well, so you can see that on our pages there. And those are always about. We write a weekly. We write about the data that comes out. So say, there's inflation data coming out this Wednesday I'll write about the inflation figures and try and figure out what that means for the RBA.

Speaker 1: 23:35

Yeah, so a good thing if you are. You talked about if you are an 18-year-old or a 20-year-old to learn about what's happening in markets and economics and finance what's happening in markets and economics and finance. Obviously, reading your following you on LinkedIn and reading your econocytes that you publish would be a good way to learn.

Speaker 2: 23:52

Yeah, I mean it gives you a good understanding of what's going on. I think the RBA website is also amazing to give you a very broad understanding of what's happening in the economy. They publish their statement on monetary policy once a quarter. It sort of gives you a perspective on every single part of the economy. It is a bit long and it can be a little bit dry and a bit technical. If you're not in the economics industry it might be a bit technical for you, but I think it still gives you a really good understanding of actually what's happening in the economy.

Speaker 1: 24:23

Yeah, well, there's a lot for us, for our listeners, to take away from this conversation and mindful of your time, deanna, but thank you very much and Sienna will make a note of a link to your podcast as well, and thank you very much for coming on the podcast.

Speaker 2: 24:39

Thank you, it's been a pleasure. Thank you, cheers.

Speaker 3: 24:52

Disclaimer disclaimer. This podcast exists for informational and entertainment purposes only. The personal opinions of the speaker and guests do not represent the view of any other party. If this recording contains reference to financial products, that reference does not constitute advice nor recommendations and may not be relied upon.