It is heartening to know that the Monetary Authority of Singapore (MAS) is constantly on the alert to warn Singaporeans of risky and even fraudulent investment schemes (MAS issues warning on trading of binary options with unregulated platforms; ST Online, March 14).

The concept of zero- or low-risk investments with the potential to yield exceptionally high returns flies in the face of investment and portfolio theory.

It is also mathematically impossible, as it implies an investment return of close to infinity on a risk-adjusted basis.

Instead of generating high returns, such investment schemes would more likely result in "gambler's ruin", where losses lead to subsequent, exponentially higher losses.

Much work clearly remains to be done where investment safeguards and investment education for Singaporeans are concerned.

The MAS and other stakeholders in Singapore's investment ecosystem need to find better ways to engage investors about investment risks, for instance, through community clubs and residents' committee events.

Where investment schemes are concerned, "caveat emptor" (buyer beware) should be the constant refrain. If it sounds too good to be true, it probably is.

Woon Wee Min