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Educating Investors Through Interaction
In the Spotlight | 10 July 2009
By: Xavier Lim
Articles (51) Profile

Created in the throes of the Asian Financial Crisis to champion investors’ rights, the Securities Investors Association of Singapore (SIAS) is stepping up in the current turmoil with a two-day event to promote greater financial awareness amongst investors.

On 18 and 19 July 2009, SIAS will be organising the inaugural Asian Investment Conference and Exhibition (AICE), to be held at the Suntec International Convention and Exhibition Centre. Expected to draw at least 20,000 visitors, the event will help investors make informed decisions about their investments through interacting with listed entities and financial institutions (FIs). Over 25 companies and FIs will be featured.

Knowledge Is Power

Recent events, which heightened the need to educate and restore confidence in markets, were the catalysts for SIAS to push ahead with AICE’09. This, with the fact, that under an uncertain economic and investment climate, arming investors with financial literacy becomes all the more crucial. “Financial crisis arising from the collapse of Lehman Brothers has affected the investment mindset of investors and aroused fear in financial products,” David Gerald, SIAS’ president, said. “As you know, investing without knowledge is a gamble. And we want to impress on this,” he added.
The event is also timely, as the recent rally is fraught with uncertainties. Although markets have bounced back from their lows in March, public opinion on the long-term sustainability remains deeply divided. “The contradictory viewpoints have made it difficult for investors to make informed decisions on their investments. AICE’09 is therefore a timely platform for investors to air their concerns, and for experts to address them,” Gerald pointed out.

Gerald also highlighted the fact that SIAS has especially directed efforts to get listed companies to join in. While listed companies are not usual participants in investment fairs, these companies, participating on an invitation basis, are good investment prospects. And it would be helpful for companies to educate the public on their business fundamentals and allow them to hear first hand their long-term growth plans.

The Minibonds saga has also eroded the public’s confidence in FIs, with many afraid to invest in new financial products. However, according to Gerald, FIs will not shy away from coming out with new, innovative financial products. But financial innovation is a double-edged sword, and he urged investors to use this event not only to know the risks involved, but also to appreciate the opportunities that it could present. FIs, in turn, will be on hand to address their concerns.

A Culture Of Education

Pushing the point forward, Gerald recounted an experience with a retiree, who had to return to her profession due to losses sustained from investing in Minibonds. As investment is a long-term process that needs to be understood and learnt, it is important to teach investors to manage and deal with risks inherent in investing. Investors should not be lured simply by returns but should understand the risks involved and walk away if it does not suit his or her risk appetite.

Government policies worldwide to prop up economies have also resulted in a low interest rate environment. In this case, it is important to invest to increase wealth for retirement. However, not only do they need to select investments wisely, they also need to learn how to asset allocate properly and understand that they cannot put all their eggs in one basket.

Gerald hangs out with the media

Gerald bantered that SIAS have been said to stand for ‘Stupid Investors Always Suffer’, but he wants to empower investors so that, alternatively, it becomes ‘Smart Investors Always Succeed’. Gerald pointed out that investors should develop a culture of education and not invest on rumours or emotions.

One-Stop Resource

SIAS will use this event as a springboard to encourage Singaporeans to look beyond local shores for investment opportunities and at the same time, attract foreigners to invest in Singapore. As such, there are plans to increase the reach of the event by featuring companies from Taiwan, Hong Kong and Japan in the future.

Supported by SGX, the event will be opened by Mrs Lim Hwee Hua, Minister, Prime Minister’s Office, Second Minister for Finance and Transport. The event itself has over 50 seminars scheduled that will touch on topics from product knowledge, investment strategies to risk management – essentials for any investor. The popular speakers include: Mr Kevin Scully from NetResearch Asia, Mr Kit Wei Zheng from Citigroup Singapore, Ms Lorraine Tan from Standard & Poors, Mr Wong Sui Jau from and Mr Roger Tan from SIAS Research.

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

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