"Trading in stocks could be injurious to your wealth!"

THE SGX is to be commended for the various measures it has instituted from time to time to ensure a 'level playing field' for all punters, and also the steps taken to safeguard the investing public.

Recently, SGX had a proposal that operators should be 'certified savvy' before being allowed to trade in certain listed counters.

The basic reality is that many are drawn into the stockmarket believing that the exchange is a veritable El Dorado.

One lady even expressed 'a broker's duty is to make money for the client!' As any broker could equally retort. 'if all that easy, why do I sit here day after day?'

"Those who 'play' the market should accept that they alone are responsible for the consequences of their trades," says Narayana.

The operative phrase in stockmarkets has traditionally been 'caveat emptor' (in reality 'caveat actor').

Those who 'play' the market should accept that they alone are responsible for the consequences of their trades.

My first broker, Mr Max Bell of Frasers, who was honest to a fault, would often sigh resignedly, "How long can you protect people from their follies?"

In this continuing context, SGX must be seen as fighting an uphill battle in protecting investors by introducing rules and regulations.

This may be an appropriate time for a clinical appraisal of where at least part of the blame can be squarely placed.

Over the years, under the pretext of offering the investing public 'a wider range of choices' SGX has given the green light to foreign listings, with a pronounced China bias ('S-chips').

SGX has also introduced a bewildering range of exotic/esoteric 'financial instruments' like 'Derivatives' and 'ETFs'... with the rather late realisation that the average retail Singapore investor really knows almost nothing about their intricacies.

In this scenario, the sensible thing would seem to be to let the small punter have his way and trade in just stocks, as he has been doing all along, leaving the new-fangled insruments to the 'big boys''.

Perhaps the best protection SGX could give to the small fry is to popularise among them the slogan "Trading in stocks could be injurious to your wealth!"

Nothing could be more explicit, or plainer.  

After that, it is 'each man for himself, and the Devil take the hindmost'.