How financial literacy can guide investment decisions

It's important to understand products on offer, read the fine print and ask the right questions

- Chor Khieng Yuit

Investors can be forgiven for feeling confused and befuddled these days, given the vast array of financial products on offer — from equities to bonds, currencies, derivatives and commodities... and plenty in between.

Add to this the seemingly endless sub-sets focused on different themes, sectors and so on and it's no wonder many people feel overwhelmed.

Ms Daphne Lye, solutions lead at MoneyOwl, which is now under Temasek Trust, says that a key danger in all of this is that investors get "information overload" and just "don't do anything".

While some may prefer the safety of the status quo and keep their savings in the bank, others like private investor Stephen Chen are taking a more active approach.

Mr Chen, who has been managing his personal and family investments since 2007, says an investor has to learn more about the products and services available, and the bankers and wealth managers serving him.

It is ultimately his investment portfolio so he has to do his part, Mr Chen adds.

Knowing and understanding products, services and concepts and the ability to apply this knowledge to make sound decisions is what financial literacy is all about.