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Our Investors Are Not Very Smart

I have read an interesting article regarding Malaysian investors are not very smart. There are other similar kind of surveys and articles that seem to show that Malaysians especially the Gen Y-ers are shying away from equities investment and prefer to hold cash than any other investment assets. Below are the whole article taken from Free Malaysia Today - Our Investors Are Not Very Smart, by Scott Ng.




Only 2% of Malaysian investors are able to answer survey questions.

PETALING JAYA: Malaysian investors are not as smart as they think they are. A survey has painted a dismal picture, saying our investors lack financial literacy.

The survey found that out of all the Malaysian participants in the survey, only 2% were capable of answering the five questions posed to them in the survey. This is in comparison with Singapore’s 20% and an 11% overall for all participants.

The latest Manulife Investor Sentiment Index in Asia (Manulife ISI) is based on 3,500 interviews across seven Asian markets.

It was also found that despite their inability to answer the survey questions, Malaysian investors displayed overconfidence in their financial literacy, with one in five rating themselves as “highly literate” when surveyed.

The report found that Malaysian investors also seldom review their portfolios and invest less frequently than their peers in the Asian region. This could be due to the fact that only 8% of investors engaged the services of financial planners, whereas the Asian average is 25%.

It was also reported that Malaysian investors rarely make use of readily available knowledge online, preferring to refer to advice from their friends and family when making investments.

The survey said Malaysian investors are also very attached to cash.

Overall, the single biggest asset holding for Asian investors is cash, amounting to an average of 52% in Malaysia, the highest in the region.

Though the survey indicates Malaysian respondents are holding idle cash, nearly half of the respondents said they did not hold enough cash. Only two per cent said their cash holdings were too big.

Malaysian investors also feel that bank deposits are safer than other options. This is also cited by respondents in Japan and China.

More information from the survey:-
Link 1
Link 2

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