I can still remember my one and only encounter with a 'relationship manager'.
He was a tall, tanned, beefy man in his 20s with a bushy head of hair. He wore a white shirt and a colourful tie and was a smooth and fast talker.
He persuaded me to part with $80,000 for five years.
I was at the POSB outlet in Great World City in mid-2003 to close several Save-As-You-Earn (SAYE) accounts. The amount totalled $80,000.
I'd kept a few POSB Save-As-You-Earn accounts ever since I started work. Under that conservative savings plan - which is no longer offered - you saved a fixed amount every month for two years.
At the end of the first 12 months, an additional 10 per cent was paid on the interest earned, and at the end of 24 months, you got a 20 per cent bonus on the interest.
The interest was paltry - less than 0.5 per cent - but the scheme forced me to set aside some money each month. I also liked how I got that little extra on my interest.
Anyway, the teller must have alerted the relationship manager because the next thing I knew, he was at my side, politely ushering me to a booth.
He sat me down and launched into a sales pitch on why I should put the $80,000 in the DBS Star Track Fund.
He sure made it sound like I was in for a fantastic deal.
What I recall him telling me most clearly was that no matter how the fund fared, I would definitely get my $80,000 back.
I queried him on this and he kept repeating that I had nothing to worry about. There was '100 per cent capital protection' if I held it to maturity.
I still have the Star Track brochure with me. In it, investors were told that this was 'a chance to participate in the performance of global leaders that will be the star performers in a stock-market recovery'.
I would get 'a minimum payout of 3.75 per cent after the first year. In addition, you may receive a potential additional payout of up to 2.25 per cent'.
To cut a long story short, after half an hour with him, the relationship manager convinced me to invest my $80,000 in the fund.
In September 2004, I received $3,000 from the 3.75 per cent payout.
Over the next four years, I got letters updating me on how the fund was doing.
If I'm not wrong (because I didn't keep all the letters), the market value of the units I'd bought were consistently below $80,000. I never got another payout.
But I wasn't worried because the relationship manager (whom I never heard from again) had assured me I'd at least get the $80,000 back.
In July this year, I got a letter and a five-page document from DBS, basically saying that a bond in the fund's portfolio had to be replaced by another in 2005 because its credit rating had been downgraded.
'The replacement resulted in a trading loss which affected the protection provided by the bond portfolio.' In layman's language, I wasn't going to get my 'protected' $80,000 back.
But all was not lost, the bank told this 'dear valued client', that is, me.
DBS had put together 'a special promotion package' (this was underlined) for us.
I would get 'an exclusive 50 per cent off sales charge!' (this was in bold font, complete with exclamation mark) if I re-invested my (now-diminished) proceeds from the Star Track Fund in any of five other funds it was offering.
Gee, did the bank really think I was that dumb?
In the end, I got back $79,342.40 from the $80,000 I put in. If you consider the $3,000 I received earlier, I got $82,342.40 - that is, I made $2,342 over five years.
But if I had put the $80,000 in a fixed deposit at a conservative 1 per cent interest during that period, I would have been $4,000 richer.
But I'm lucky.
Some investors are now reeling from the DBS High Notes 5 debacle where they might not get back even a cent of the principal because of its links to the now-bankrupt investment bank Lehman Brothers.
Still, it bothers me that my 'relationship manager' had not been more open with me. Why did he keep going on about how safe my money was when there was no guarantee I would get it all back?
But I am also reasonable enough to realise that it was ultimately nobody's fault but my own that the fund didn't live up to expectations.
Although I am not financially savvy, I am an adult, I am educated, it was my money and the burden was on me to do research on the fund before I committed myself. Indeed, if I had made pots of money, I would have had no complaints about the relationship manager.
Instead, I was goaded by greed. I wanted easy money and the interest sounded good. Too bad for me that I took a gamble that didn't pay off.
It's a lesson that I never seem to learn.
I was looking at some old Central Depository account statements the other day and it pains me to realise that one stock I'm holding was trading at $5.65 in December last year. It is now $1.80.
Why-oh-why didn't I sell it then and make a big profit? Because I thought it would go up to $6.
Why-oh-why didn't I sell it when it went down to $4 or even $3? Because I thought the price would recover. What am I to do now? Hold or sell? I have no idea.
I don't think I'm a particularly greedy or materialistic person, but I certainly would like to increase my wealth so that I'll have an easier life when I'm old and can't work.
In fact, when you think about how the cost of living is rising every day, greed doesn't even come into the picture anymore. It's about survival and it's about fear.
People need to find ways to invest their money such that the returns are higher than the scary inflation rate. The question is, how?
I've come to the conclusion that I'm a tortoise rather than a hare when it comes to making money.
I'm one of those who have to work hard and plod all their life to grow their wealth. I'd never be a hare who can take wild gambles, play the market and strike brilliant deals to fatten his bank account.
But the desire to make a quick buck is hard to suppress.
Last week, after the United States House of Representatives turned down the financial bailout plan and stock markets plunged, top on my mind was whether I should take advantage of the situation and do a mini-Oei Hong Leong.
As reported, the Singapore tycoon had bought one million AIG shares recently when the company was in trouble and its share price dived, then made a killing when it was saved by the US government and its price shot back up.
But, of course, I didn't have the money, acumen, expertise, experience, guts and gumption to buy any stocks, let alone strike it rich, which is why Oei Hong Leong is Oei Hong Leong and I'm, well, a salaried journalist.
But that's the safest route for me.
I just need to look for a reliable bank to park my money in fixed deposits, never mind if the interest is paltry. At least my money will be safe.
Perhaps DBS could do us a favour and bring back its Save-As-You-Earn scheme.
This article was first published in The Straits Times on October 5, 2008.
