Forum letter writers Christie Loh and Ee Teck Siew articulated balanced views on protecting investors (Too many regulations will hurt Singapore market and investors, Aug 8; and Take steps to protect investors from being burned, Aug 6).

A number of factors are in play currently, including rock-bottom valuations and commissions, and the availability of a wide range of markets and instruments with which to trade.

That short-term punting mentality has come back into trend is also telling of the current challenging times. Research suggests that such an environment spurs excessive risk-taking behaviour in investors who will seek to punt on any opportunities they come across - even unrealistic ones - in an attempt at enjoying a financial windfall.

Investors, not only in stocks but also in any asset class, clearly need to carry out their own robust due diligence and exercise sound judgment to avoid getting burned.

Financial literacy is a big part of this; investment research, for instance, suggests a positive correlation between financial literacy and positive investment outcomes, with more highly financially literate investors less likely to suffer huge losses on their investments.

Financial literacy and investor education are clearly paramount. Besides laudable existing initiatives by DBS and the Singapore Exchange to boost financial literacy, stakeholders in Singapore's investment ecosystem could continue to engage the wider community about investment risks, for instance through community clubs and residents' committee events.

Woon Wee Min