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3 Investment Risks Singaporeans Take Too Often When They Shouldn’t

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Joanne Poh

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Safe, conservative, perhaps even boring—this is how others tend to view Singaporeans, and indeed how many Singaporeans view themselves. But when it comes to investing, many Singaporeans are becoming more and more daring, venturing overseas to purchase property and even getting themselves entangled in some decidedly dodgy investment schemes.

Here are 3 investment risks Singaporeans have been taking and that aren’t necessarily the shortcut to riches they think they are.

 

Investing in foreign property

The high prices of property in Singapore and the restrictive rules surrounding HDB purchases mean that many ordinary people here are priced out of the property market. Conversely, property virtually anywhere else in the world looks affordable compared to ours. While property even in relatively expensive developed cities like Melbourne and Vancouver is still a steal compared to private property in Singapore, property in neighbouring developed countries looks dirt cheap in comparison.

This has led to many Singaporeans investing hungrily in foreign properties, such as in the Iskandar Malaysia project in Johor. However, many fail to realise that investing in foreign property can be quite risky, as evidenced by the fact that Iskandar Malaysia values have actually been falling.

Some of the risks involved in purchasing foreign property include falling property value, sometimes quite dramatically, as well as unexpected changes in regulation. There’s also the commercial risk of the developer going bankrupt. CASE has already received numerous complaints from buyers who couldn’t get their returns or payouts in foreign property investments. So buyer beware.

 

Jumping into speculative trading with no knowledge

Those aunties and uncles you see duking it out at the casinos are no different from the guy who sits behind his computer screen and tries to live out his fantasies of becoming a day trader – never mind that his strategy resembles that of the average punter at the baccarat tables.

Sure, there are people who day trade for a living, but it’s not quite as easy as you think. There’s a reason trading for a living is a stressful job. And just because you attended that “Forex Trading Secrets” or “Make Your First Million with Stocks” seminar you saw advertised in the classifieds doesn’t mean you’re instantly an expert, no matter what the trainer tells you.

So before you become a speculator who wants to make a quick buck on the market, be warned that unless you have lots of capital your chances of getting burned are high.

 

Any investment schemes out of the ordinary

Conmen are having a field day with Singaporeans, as evidenced by the number of people who got tricked (some more than once) by investment scams like the Suisse International gold buyback scheme and the almost identical Geneva Gold scam.

Blinded by greed, many Singaporeans sign themselves up for “investment” schemes that promise them payouts so generous as to be downright fishy. Incredibly enough, it’s not uncommon to hear of Singaporeans being conned by more than one scam in their lifetimes. In addition, many victims aren’t wealthy, yet they pledge a huge chunk of their life savings for investment in these bogus scams.

I’ve yet to hear of someone who got rich through some unusual investment scheme. The hard truth is that most people make money through pretty traditional, and legitimate, investment vehicles. So if someone excitedly tells you about this new investment scheme that’s going to be the solution to all your problems in life,  be very, very wary.

Have you ever made a risky investment? Tell us how it panned out in the comments!

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.