Is financial prudence a part of nature or nurture? Are some just born better investors? Vince Koh, relationship manager at PhillipCapital, has interacted with investors at nearly all stages of life, and what he has learnt may come as a surprise.
The 31-year-old joined the financial sector after graduating from Nanyang Technological University in 2014. Prior to Covid-19, Koh ran financial literacy workshops for children at Bishan Community Centre, using games to simulate real-world investing.
“[In the games,] I got some of my dealer colleagues to ‘sell’ them stocks. Some are Ponzi schemes; if they bought those, they would lose half their investment by the end of the workshop,” Koh tells The Edge Singapore.
But savvy investors can get a taste of the good life. “There’s also a bank where they can save their money. When they earn income, they can buy candy and stationery. We tempt them to spend their money on these luxuries but they should know to spend within their means,” says Koh.
Even at a young age, these mini-investors already have different attitudes towards money, says Koh. “One kid won because she saved and invested the most. Those who enjoyed life, buying candy and stationery, ended up with little money.”
While the workshop imparts valuable lessons, that project is literally child’s play. At Koh’s day job, the stakes are real and the rewards are greater than a sweet treat. At PhillipCapital, Koh welcomes customers who come with a variety of questions. “It could be about opening a trading account or updating account details. From there, we can start a chat about investing,” he says.
Most clients who visit the integrated financial house’s offices at Raffles City Tower are aged 40 and above, says Koh. These clients prefer a personal touch when it comes to investing. “They are also generally more riskaverse and prefer more defensive portfolios; they are comfortable with 5%–6% returns.”
While that is a respectable figure, the latest generation to come of investing age is hardly satisfied with such returns, says Koh. “Generally, millennials are looking for double-digit growth. They have financial goals they want to achieve in the future and they want to grow their capital fast.”
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Koh is wary of such expectations, though he acknowledges the trends that have fuelled such starry-eyed optimism. He adds: “Personally, I think these expectations are unrealistic in the long term. Some of these millennials began investing during the technology boom, because with Covid-19, a lot of the technology stocks went up. This could be their first time looking at the market and they may think that normal returns are around 30%–40%.”
Those in their 40s and above have been through many market cycles, including the Asian Financial Crisis and the Global Financial Crisis, says Koh. “They’ve been through ups and downs. Therefore, their appetite is more measured.”
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Generally, millennials are looking for double-digit growth. They have financial goals they want to achieve in the future and they want to grow their capital fast.
To help the green investors, Koh created a webinar series along with colleagues from various departments at PhillipCapital. “They’re not RMs [relationship managers] — one is from unit trusts, another from marketing. We also have panellists from our customer experience unit and dealing team. Some of them have no financial background,” says Koh. “We’re not selling any products but it’s really about their personal interests.”
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Titled “LimKopi with Millennials”, the young panellists tackle issues close to their hearts in a free monthly webinar streamed on Facebook and YouTube. Since launching in September 2021, the series has discussed gender differences in investing, saving for retirement and long-term investing plans, among others.
“We want to discuss topics that millennials are very concerned about, and with our discussions we can hopefully expand their horizons,” says Koh. “It’s been a good experience, honestly. The cast — we all know each other quite well and we have quite a good understanding of one another,” he adds.
One topic Koh hopes to discuss is the cost of marriage. “I’m in that phase of life right now, so I would like to record my experience and share that in a webinar so I can engage those in their 30s and 40s.”
Bullish on US and China tech
This year, Koh is at a key inflection point in his life, and not just financially. “I am getting married in February. The downpayment has been made, so I have to pay for the wedding.”
One asset closely tied to marriage is housing. “I also need to set aside funds to renovate my own room because my fiancée will be staying with me for two to three years before my four-room BTO [build-to-order] flat in Tampines is ready,” says Koh.
Following that, Koh has also apportioned some money for a honeymoon — “if we are permitted to travel” — along with plans for a child.
How does Koh plan to afford these purchases? A quarter of his portfolio is in unit trusts. “I make regular contributions of $1,000 every month; they are in profits, I’ve been riding the wave from 2017. So, when I need funds, I’ll just withdraw from my unit trusts,” he explains.
About three-quarters of his portfolio is in equities, spread across US, Hong Kong and China. “I arranged the portfolio to be focused on US technology and Asia, because I think there is still growth potential in Asia. The pendulum is swinging back from the west to Asia. In particular, I allocated a portion to China tech.”
A proud fan of Apple’s products, Koh owns the “entire ecosystem” of the technology giant’s gadgets, including “a few thousand dollars” worth of the company’s stock. “I entered around April 2021 at US$125 [$168] per share.”
Shares in Nasdaq-listed Apple are trading at US$174.83 as of Feb 8. When investing in China, Koh has learnt to be “in control of emotions” when a stock spirals.
“When Alibaba crashed last year due to the Ant Financial IPO halt, its share price went down to US$250. I entered quite a bit then but it went down further. I thought US$170 was the lowest it could ever go.”
Shares in the New York Stock Exchange-listed Alibaba Group Holding reached a low of US$108.70 last December. It has since recovered to US$121.90 on Feb 8. “I wanted to do DCA [dollar-cost averaging] but it’s painful because my portfolio drops a lot more and I have to endure the loss; the numbers are in my account every day in red. But, you know, it is a profit-making company; its business model is good. It has just been beaten down by the market,” says Koh.
Gains in crypto
Finally, about 1% of Koh’s holdings are in cryptocurrency. Specifically, he has high hopes for Luna, the native token of the Terra blockchain. The ninth largest cryptocurrency has a market capitalisation of some US$30 billion, and swelled from about 80 US cents per token this time last year to US$56.36 as of Feb 9.
“My only regret is not entering Luna earlier,” says Koh, who only owns one token. “Some of my friends own between 200 and 300 Luna. It’s quite a significant part of their wealth.”
While his exposure to the volatile cryptocurrency sphere is limited, Koh himself thinks his overall portfolio is “quite aggressive”. He fondly remembers his first brush with investing in 2014 and how far he has come. “I remember this very clearly. I went home after visiting Plaza Singapura — it was very crowded — and I looked up CapitaLand Mall Trust. I learnt that they paid dividends every quarter,” recalls Koh. “I told my mum: ‘We can make money; we can be landlords!’”
As a housewife married to an immigration officer, Koh’s mother was initially hesitant. “She said: ‘Don’t invest; you’ll lose money.’ [My parents] want to see $100,000 remain $100,000; they’re not very comfortable with volatility.”
But as Koh learnt the ropes in the financial sector, his investments reaped rewards. “She saw my results and she gave me some funds to invest for her, which I put into the Singapore market during the 2020 crash. They are mostly in fixed deposits and insurance plans.”
The Central Provident Fund (CPF) is also a good tool, says Koh. “I told my mum to top up her CPF; it’s a very good investment tool because she hasn’t hit the basic retirement sum, so it earns 6% per annum on the first $30,000. I’ve been contributing as well, which grants me tax relief; it’s a win-win.”
Looking ahead, Koh’s hopes to tick off financial liabilities as “soon as possible”. “The house renovation, buying a car for my kid — I really want to complete these.”
“Maybe in the next five to 10 years, I can start to look at retiring early,” says Koh. “I want to retire early, at around 50. That will give me energy to do the things that I love to do, like learning Japanese. I love the food, the culture and I want to travel the world.” For now, his work could help those around him achieve the same freedom.
He says: “I enjoy holding webinars because I can share my own investing experience and help others in their own investing journey. I believe helping people gives you satisfaction intrinsically.”
Photos: Albert Chua / The Edge Singapore