Welcome Speech by Mr. David Gerald, President & CEO of Securities Investors Association (Singapore) for Financial Literacy Workshop 2010

Date: December 7, 2010

1. Good Morning! Welcome to the inaugural financial literacy workshop for institutes of higher learning. This is a 2-days programme specially designed for university students. It covers 4 important aspects of personal financial management – personal financial planning, credit management, insurance planning and investment planning.

2. With the endorsement and support of Sim Kee Boon Institute of Financial Economics, SMU, SIASS and Credit Counselling Singapore have come together to organize these workshops with the support of our sponsors – Citibank, Great Eastern, ACCA and CBS. This programme is also supported by CPF and IFPAS.

3. The main objective of this initiative is to prepare young adults for their financial challenges when they start their career. You need to appreciate that there are many financial instruments and complex investment products in the market. Before you can start investing in these products, You need to have basic skills in saving, managing, investing and preserving wealth. You must embark on a sound financial planning exercise.

4. I have been leading SIAS for the last 11 years. During this time, I have seen the best and the worst in the game of investing. Not long from now, you will be graduating and embarking on your life-long journey. Based on my experience at SIAS, please allow me offer you some advice on how to succeed in your financial journey.

– Firstly, Knowledge is the most important ingredient for successful investing. We hope that with this new initiative, every young working adult will be equipped with the knowledge and practical skills of managing one”s money through savings, budgeting and investing. Investing without knowledge is a gamble. Today, many choose stocks, for example, without knowing the company or what its prospects are. They do not ask the important question: Why am I investing in this company? They are not interested to research the company to determine the worth of their investment. The result is a loss.

– Secondly, you need Discipline.You need discipline to save, budget and live within your means. Discipline to set money aside for long term investment and for rainy days. Many are burning their savings on spending beyond their means. Credit card spending has become the fashion especially with young citizens but credit card usage without discipline is a disaster.

– Thirdly and most importantly, you need to learn to overcome greed.You have to understand that an investment that offers you a high return, is often saddled with high risks. The recent Lehman Brothers, minibond saga is a good example. Many invested in the minibonds without knowing neither the features nor the complex risks inherent in these structured instruments. They invested without knowing the risks at all. They were only interested in the 6 percent return promised by the product distributors. You all know what happened. If you do not understand the product and the risks it carries, do not invest.

– Lastly, Patience is required to be a good investor.

It is proven historically, that investment in stocks have given a higher return over a long period of time to those who have been patient. Avoid short cuts. Don’t be in a hurry. Invest and not gamble.

5. You must learn from the mistakes of others and always be focused on your financial objectives. Do not be distracted by the noise in the market place. If you seek short-term high returns then you are not an investor, you are a trader or, worst still, a gambler. Be an informed investor. Take your time and calculate your risks.I hope you will take home with you what I have shared with you this morning.

6. Now, without further ado, we shall now start this programme with the personal financial planning module. Thank you.