Are Singaporean investors overly confident about their portfolios?

75% expect gains this year.

Some Singaporean may be overly confident about the strength of their portfolios. According to a report by Natixis Global Asset Management, a staggering 75% of local investors believe their portfolio will perform well in 2015, and many feel optimistic they will achieve better returns than 2014.

However, a plethora of concerns remain. More than half or 57% of Singaporean investors say they do not have clear financial goals, while 61% do not have a financial plan.

“Whilst the optimistic outlook Singaporean investors have towards their investments is encouraging, overconfidence can have a damaging effect on financial success and financial security when it leads to unrealistic expectations and a lack of planning,” said Madeline Ho, Head of Wholesale Fund Distribution, Asia Pacific, Natixis Global Asset Management.

Investors also report being conflicted between obtaining returns and protecting capital, worry their portfolios are not protected from market shocks, and struggle with emotional decision making when it comes to investments.

“Financial success and financial security when it leads to unrealistic expectations and a lack of planning. Singaporean investors need to have clear goals for what they want to achieve and adopt portfolio construction strategies that maximize returns while at the same time managing risk and helping to insulate their portfolio from market shocks,” Ho added.
 

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