02-06-2013, 10:09 PM
Hi MW,
If one could use hindsight, we would have told CPF board that it was unwise of them to allow people to use a large proportion of their CPF OA for equity investments before the dot.com crash.
What is required of individuals is that to practise financial prudence on their part by acquiring financial knowledge/literacy. We have a population of highly educated people who have the huge potential of replicating this intelligence in financial matters (unfortunately they are not doing so now)
Personally, I find the current CPF system of controlling what we can invest a bit ridiculous (since often what CPF approves goes through the process of "inspected by 4" as what Peter lynch writes, examples can be seen in ETF/unit trusts/ILPs, and the previous CPF approved shares scheme which has been scrapped). In addition, the populace too will not accept the fact our current system restricts further the usage of CPF-OA. This move will likely be a political disadvantage for you-know-who. To conclude, many Singaporeans are not financially knowledgeable and have a tendency to over leverage/stretch themselves financially. However there is a limit to how much the govt can control people's consumption habits as well.
If one could use hindsight, we would have told CPF board that it was unwise of them to allow people to use a large proportion of their CPF OA for equity investments before the dot.com crash.
What is required of individuals is that to practise financial prudence on their part by acquiring financial knowledge/literacy. We have a population of highly educated people who have the huge potential of replicating this intelligence in financial matters (unfortunately they are not doing so now)
Personally, I find the current CPF system of controlling what we can invest a bit ridiculous (since often what CPF approves goes through the process of "inspected by 4" as what Peter lynch writes, examples can be seen in ETF/unit trusts/ILPs, and the previous CPF approved shares scheme which has been scrapped). In addition, the populace too will not accept the fact our current system restricts further the usage of CPF-OA. This move will likely be a political disadvantage for you-know-who. To conclude, many Singaporeans are not financially knowledgeable and have a tendency to over leverage/stretch themselves financially. However there is a limit to how much the govt can control people's consumption habits as well.