Any stock market needs to be regulated in a bid to bring in fairness and transparency, according to an international fund manager. "Stock market is quite like electricity - it’s great to use, but it can also kill you,” Michael Preiss, Economic Advisor, Ceylon Asset Management told the Business Times.
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| Michael Preiss |
He added that with wealth comes responsibility and that the share market is really about investing and not trading’. “It is a long term business,” he noted further. He also pointed out that while trading can win a lot of money, it can also lose a lot.
He added that this has also to do with financial literacy. “The regulators (here) should spend sometime on educating the masses while investors need to do their homework," he said.
Mr. Preiss who is also guest commentator on Bloomberg TV, CNBC Asia, BBC and India’s New Delhi Television, pointed out that larger state entities such as the Employees Provident Fund (EPF) should help grow the market.
“The EPF shouldn’t invest in ‘obscure’ shares. They should invest in transparent shares, because state entities like the EPF have got the potentiality to move the market,” he explained. He noted that it’s unrealistic to say anyone can always ‘time’ the market (when it’s a bull or bear market).
“Don’t buy stocks; invest in businesses," he advised, noting the importance of long term outlook in investing. Mr. Preiss, who is a columnist for finance magazines in China, added that the pull back currently seen in the Colombo Stock Exchange (CSE) is a good one. “Now is a consolidation phase,” he said, noting that ‘nothing goes in a starlight line'.
He added that the CSE saw some 90% gains last year and that in a secular bull market such as the CSE, this is a healthy correction. |
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