Retail investors want best value for their money

Securities Investors Association (Singapore) (Sias) president and chief executive officer David Gerald expressed his disappointment that 90 per cent of Singapore retail investors basically lack trust and confidence in the financial services industry and stock market (How to bring back the retail investor?; May 14).

In my working years, I interacted closely with countless small players.

Their aspiration - to be brutally frank and cynical - is simply to make as much money as possible in the shortest time, with as little outlay as possible.

This mindset goes a long way to explain the fascination with cheap but not-so-good penny stocks.

Further evidence of this is seen in the faithful following Singapore Pools has. As the man in the street would argue, how else to "strike" a few thousand dollars for just $1, the daunting odds be hanged?

This is surely the most convincing explanation why retail investors are largely not actively participating in local stocks.

It was reported recently that Sias withdrew its "Most Transparent Company" award from Midas Holdings, which had won it from 2012 to 2016 (Sias withdraws 'Most Transparent Company' award from Midas; May 31).

Further evidence of this is seen in the faithful following Singapore Pools has. As the man in the street would argue, how else to "strike" a few thousand dollars for just $1, the daunting odds be hanged?

If Sias, with its expert staff, could have been led down the garden path for so many years, what hope do trusting small lambs have of not being shorn to the bone? By then it would be too late for them to discover and repent.

The reality is that the small investor has, for too long, been regarded as necessary to make up the required numbers to retain listing, but otherwise dispensable.

Suitors who have been jilted for bigger players tend to have long memories and are unlikely to forgive easily.

Narayana Narayana

A version of this article appeared in the print edition of The Straits Times on June 06, 2018, with the headline 'Retail investors want best value for their money'. Print Edition | Subscribe