Knowledge is power — Elaine Heng
MAY 5 — Benjamin Franklin put things in perspective when he said: “An investment in knowledge pays the best interest.” Knowledge and experience certainly set astute investors apart and pay off in the long term. Investor knowledge is also increasingly becoming important when investing in Singapore. Since the beginning of this year, for instance, banks have had to assess if an individual has the relevant knowledge and experience before offering a Specified Investment Product or opening an account to trade Specified Investment Products listed on an exchange. As an investor, what are the basics one should be aware of and what resources can be leveraged to build up one’s knowledge?
Know yourself: understanding the Asian investor
Research from the Datamonitor Asia Pacific Wealth Markets Database last year showed that 41 per cent of Asians with more than US$100,000 (S$124,000) of liquid assets are newly affluent, and that this population will grow from 22 million to 31 million by 2014, with liquid assets of about US$12 trillion.
This reinforces how crucial it is for the newly affluent to be equipped with the right knowledge and advice to manage their wealth.
Each individual’s life situation, needs and wants are unique. One of the first steps in financial planning is to know oneself and understand one’s needs — be it personal, family or business.
Banks, for instance, have tools to help one crystallise individual, family and business needs and to map out quality financial solutions in line with one’s needs. The affluent value this approach. Our research shows that the average Asian affluent wants:
- Conversations that really listen to what they have to say
- Quality advice, delivered consistently
- Solutions that are aligned to their needs
- Ongoing and regular reviews of their investment portfolio
- Access to multi-channel experience Know the market and your investments
A recent study by Standard Chartered Bank and Scorpio Partnership on affluent Singaporeans showed they primarily invest in unit trusts, high-interest savings and real estate.
To help with investment decisions, affluent banking propositions offer comprehensive resources to investors such as regular research publications and email reports on equities, real estate, asset allocation and the economy; and market update sessions with economists and investment experts.
Most banks also offer resources and research for investors available online.
If one does not have access to such resources or a dedicated relationship manager, annual reports, prospectuses and news on companies can also give a good idea about the underlying stocks that one plans to invest in for investments such as unit trusts.
Websites such as Bloomberg Markets, CNBC, Yahoo! Finance and Google Finance also provide news, currency and stock market information free of charge. You can also choose to subscribe for RSS feeds or website alerts for the latest market information. For those interested in investing in the real estate market, the Urban Redevelopment Authority website is a helpful online resource to monitor the latest trends, details on last transacted units and corresponding prices. For foreign exchange, online resources such as FXstreet.com provide reasonably timely data.
While these are basic resources that one can harness and do not necessarily make one a knowledgeable or experienced investor, they are a good place to start. Individuals should consult a financial adviser to understand one’s financial needs and priorities better, and leverage both institutional and online resources. By investing time and effort in the fundamentals of knowing oneself and the market better, one is a step closer to being ahead of the curve. — Today
* Elaine Heng is the regional head of priority and international banking for Singapore and South-east Asia at Standard Chartered Bank.
* This is the personal opinion of the writer and does not necessarily represent the views of The Malaysian Insider