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Make Equity Investing Part of Financial Planning: SGX

Make Equity Investing Part of Financial Planning: SGX

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Published by Winston Wisdom Koh

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Published by: Winston Wisdom Koh on Mar 26, 2012
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03/26/2012

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BByy RR SSIIVVAANNIITTHHYY(SINGAPORE) The Singapore Exchange (SGX) is pushing investor education in a big way in thehope that the retail public will make stock market investing part of financial planning forretirement.In an interview with BT, SGX executive vice-president Chew Sutat said that the exchangebelieves there is a need to build an equity investing culture as opposed to the present morespeculative orientation.'In Australia, 43 per cent of their retail market is active and in Hong Kong, the figure is 35 percent,' said Mr Chew.'Here, the figure is much lower at 7 per cent. When people retire, they are overweightproperty, underweight cash and don't have enough to live comfortably.'This is a problem because with longer life spans, low interest rates and rising inflation, peoplewill find that savings alone or simply speculating in stocks is not enough. You have to haveproper financial planning and in this regard, proactive investment in stocks is one of the keycomponents.'SGX has identified three classes of retail investors: the regular investor who is typically retired,aged 55 and above and who tends to focus only on stocks; the ad-hoc investor who onlytrades when the market is 'hot' and tends to be prone to the 'herd mentality'; and the younginvestor aged 18-25 who tends to trade online and is hungry for ideas.For the first group of regular investors, education would focus on new products and theimportance of diversification.For the ad-hoc player, SGX hopes to address the importance of research before investing and aportfolio approach as opposed to short-term punting.For the young investor, the exchange will make as much useful information available onlinewhile stressing the importance of risk management.Over the past few months, it has launched several initiatives including the SGX OnlineEducation programme which offers free online courses on Specified Investment Products suchas exchange-traded funds and structured warrants, and the My Gateway portal on its websitewhich provides regular sector updates.In addition, SGX has hired external consultants to conduct a survey to determine retailinvestors' motivations and expectations.'The challenge is how to actively engage and educate 1.5 million Central Depository (CDP)
Make equity investing part of nancial planning: SGXhttp://www.businesstimes.com.sg/sub/storyprintfriendly/0,45...1 of 226/3/12 9:51 PM

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