EPF’s CEO on the same side as me on forex.

I personally dislike buying and selling currencies for profits. Read here: Hedging? Do it now, for future. property in Australia? Coming back to forex, just look at those small countries where its currency could be easily manipulated. Seriously, do these countries benefit when the “investors” gain or lose money from the speculative activities? Let’s also not kid ourselves that only the small nations could be at the losing end. Do google for ‘Black Wednesday.’ Read and understand that even a currency which is considered strong could also be vulnerable.

Reported in The Star today, the Employee Provident Fund (EPF) chief executive officer Datuk Shahril Ridza Ridzuan said the following during the Q&A session for Star Media Group’s PowerTalk: Business Series.

“The EPF does not view forex or currencies as a viable investment class because it is a very high risk activity. Forex or currencies by their nature are dependent purely on trading. They are not an investment per se – like keeping cash in a capital market and hoping to get interests on it. We do not view the forex component as the driver of returns. The reason for this is simple. Based on our 30 years of investing experience, forex is very volatile, so we cannot rely on it to give us returns. Rather, we rely on the underlying assets of our investments to give us the returns.”

Just a few weeks ago, a good friend who has not bought stocks asked me for a few stocks to buy. I politely declined but he insisted. I told him the shares that I was buying and he asked me, ‘these shares are not so famous hoh?’ I laughed and that was the end of our conversation. I really do not believe investing in a good company meant buying it TODAY because it’s good and selling it TOMORROW because it’s no longer good? We can determine whether a company is good not within one day? Well, everyone knows how fast you may need to react when it comes to forex. Would the economy of any country be changing within every few seconds or minutes? Please do not ask me for an answer. Regardless of investment type, I wish everyone the best. Just stay objective.

written on 29 May 2016

next suggested article: Gen-X: Stability, strategy and investing in property



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