Date: August 23, 2012
Mr Magnus Bocker – CEO, Singapore Exchange
Partners and friends
Thank you for taking you time off your busy schedules to be with us today for the launch of the 1st Singapore Investment Week.
This event is an important milestone for SIAS. Investor education is an important constitutional objective for our association. We consider this an important initiative for our capital markets development. We are able to do this because of the strong support from our partners from the securities and finance industries.
This inaugural “Investment Week Campaign” basically seeks to instill the importance of investing amongst Singaporeans to help them make informed investment decisions. Since 2000, SIAS have always been advocating greater investment literacy and we realised that though Singapore have had many national public education campaigns before, there has not been one that is truly focused on investment literacy. Hence, we felt the need to come up with this campaign to raise awareness on the whys and hows of investing. The rising inflation rate is affecting real dollar value and Singaporeans need to understand that they cannot rely solely on their monthly salary to grow their wealth nor can they simply leave the savings in the bank anymore.
Whilst we note, from the level of participation at out investor education activities, there is a growing interest amongst Singaporeans to know more about investing, but there is still a gap in understanding that there are risks in any investment. Being able to understand the associated risks and, more importantly, their own risk profile and investment style will greatly go towards being a successful investor.
At SIAS, we meet many investors. I would like to share a couple of cases of investors that have not followed these principles. One is of a teacher, who put $540,000 of her retirement savings, her entire savings actually, into Lehman Minibonds. With the collapse of Lehman Brothers, it put her entire investment at risk and for a time it looked like she would lose every cent.
Another is of a housewife who was trading the Nifty Index Futures. In August 2007 the Nifty fell over 10% in a few days and she incurred a trading loss of $64,000 over those few days.
Whilst it is important to invest, one must do so wisely and with knowledge. Many Singaporeans, like this Teacher and housewife, have a “all-or-nothing” mindset i.e. they put all their eggs in one basket. It is important, therefore, that investors understand the importance of diversification. Diversification across asset classes reduces risk. Also, they must understand that, in the pursuit of making money fast, the use of leverage instruments, like Index Futures as in the case of the housewife, can also accelerate losses.
It is stories like these that made many Singaporeans fear investing. But yet it is important to secure one’s financial future. It is a known fact that CPF savings will be insufficient to see through one’s retirement needs comfortably. To this end SIAS has been conducting investor education seminars since 2000. Over 70,000 people have attended over 700 programmes.
The Singapore Investment Week is yet one event for investors to get educated and updated in their investment knowledge. Over the week, participants will get exposed to investment concepts like value investing and how to build an investment portfolio that provides passive income. In addition, there will be video interviews dated daily onto the website and workshops for investors to get more knowledge to invest wisely.
Unfortunately, there is no “risk-free” investment. One needs to balance one’s need for risk, ability to accept the risk and know one’s willingness to accept this risk. Whether you are doing your investments yourself or have an advisor to assist you in your investment decisions, only by having a congruence of these three aspects, can one succeed at investing. At the end of the day, we are all responsible for our own investment decisions.
To help investors, make more informed investment decisions, SIAS is pleased to announce today that we are launching an investment guide book. This will soon be available to the public at the SIAS website and in bookstores. The guide book, the 3 Dimensions Of Successful Investing, is written in collaboration with Sim Kee Boon Institute of Financial Economics, Singapore Management University.
The 3 Dimensions Of Successful Investing provides investors with an introduction to the various investment products, their features and associated risks. Equally important is the need to understand one’s self better and the guide highlights the importance of knowing one’s self, the products and the strategies as a framework to successful investing.
In addition to the book, readers will also have an online resource that is hosted on the SIAS website. The website will also contain additional reading material and chapters covering alternative investments, property and also FOREX.
This book would not have been possible without the kind assistance of SGX and the Sim Kee Boon Institute for Financial Economics, SMU. My sincere thanks for all their assistance to getting this book to print. I also would like to thank all the sponsors and participating companies for coming forth to support SIAS in organizing this 1st Singapore Investment Week. Your invaluable assistance and contribution goes a long way to help educate and secure the financial future for all Singaporeans. And last but not least, our friend of SIAS, Mr Magnus Bocker, for kindly gracing this event as our Guest-of-Honour.