They pay money to learn to make money
Financial training courses in demand despite volatile markets; experts warn against get-rich-quick mindset
By Joanna Seow
(Taken from the Straits Times on the 23rd March 2009)THEY claim to teach you how to become a millionaire, retire rich or even make 'lots of money' during a recession.
Whatever the claims, eager participants are lining up for financial training courses, not in the least put off by the economic slump or plunging share markets.
These courses are not cheap - fees range from around $2,000 to more than $7,000 for anywhere from two to eight days of coaching - but the lure of trading riches overrides the cost. Companies say the recession has not dampened demand, with 40 people turning up on average - whether retirees, self-employed, students or managers - all looking for an edge.
Courses usually specialise in a particular market, such as stocks, foreign exchange (forex) or options.
'Each option contract controls 100 shares, so option trading is low risk, yet gets high returns,' said one organiser.
'The forex market has tremendous volume and is open 24 hours a day,' enthused another.
Or, 'the US stock market has over 14,000 listed companies for you to choose from, and it's tax-free'.
While the hooks differ, most courses have one thing in common: selling strategies to help people get the most they can out of financial markets - and at a time when every extra dollar counts.
The training goes further than simply teaching from a textbook, and coaches focus on money management, psychological aspects of trading and software usage.
Sceptics, of course, will cite the old adage: 'Those who can, do; those who can't, teach'.
Mr Chris Firth, the chief executive of wealth management firm dollarDEX, is one. He is 'very dubious about these courses' and feels that if traders are really so brilliant, they will be spending more time trading rather than training other people.
Yet customers still roll up. At the three free course previews attended by The Straits Times, there were people with trading experience and those without. Most were keen to find ways to boost their income or even switch to full-time trading.
Administrator Diana Woo, 34, said: 'Now that the economy is so bad, I want to see how I can get more money to supplement my income.' She has done some share trading in the past, and was at a preview for a forex course.
As course organisers are quick to point out, getting some coaching should not be seen as a get-rich-quick scheme.
Mr Ee Chee Koon, the chief trainer and chief operating officer of Asia Charts, said people desperate for instant cash should not turn to trading, as the wrong mindset could be dangerous.
'A man came to me in desperation in 2007 after losing 50 per cent of his retirement fund in bad trades,' he said. 'He had followed poor advice from someone else. I told him to cool down before starting to trade again, because his psychology would be very weak.'
Investing in a share trading course in January proved worthwhile for area information technology manager Jason Kwok, 38, who recouped the $2,900 he spent on the Asia Charts course within a month and recommended the course to four friends.
Full-time trader Eric Lye, 36, also thinks he got enough bang for his buck. He used to earn a five-figure monthly income at a bank, but after attending a T3B Holdings forex trading course last year, he was able to earn the same or more from trading.
Ms Karen Loh, a marketing manager with a multinational corporation, was also highly impressed with the T3B course she attended last September, which set her back by about $2,500.
The 36-year-old said: 'The training was thorough and comprehensive, and constant support is provided even after the course through teaching gatherings on Saturdays and an online forum.'
She had attended another forex course, which was a disappointment.
'Many people think they can just go for a course, then start trading on their own without any support, but it's actually very tough,' she said.
People should also be wary of trainers who misrepresent their qualifications, like Mr Clemen Chiang of Freely Business School. He claimed to have a doctorate in option trading but was exposed as getting the degree from an unaccredited university. This month, the Small Claims Tribunal awarded participants of his trading seminars partial refunds of course fees.
Most people told The Straits Times that courses should teach how to invest wisely, including in volatile times like now. They also want continuous after-course support, such as daily coaching, weekly discussion sessions or online trading forums and newsletters.
But skill and nerve come into it as well. Mr Clarence Chee, a forex trader and a coach with T3B, said many people who trade are losing money or are too scared of the risks involved.
'People need to understand that with the right strategies, the risk is manageable,' he said.
Frankly, I am skeptical of such trading courses. The line of reasoning is very simple. If the trading strategies and systems that they are employing are indeed that profitable, why would they offer to teach others ? Surely, trading will be much more lucrative than conducting courses.
If they wish to help the public in improving their finances through trading, I think charging a few thousand per head for each course is more than enough to cover the cost of the courses over a few times round. It would be far more cheaper to read some technical analysis and trading books and subsequently, paper trade for a while to see trading is workable for you. If not, it won't be too late anyway to go for such courses.
I am not doubting the abilities of these traders and since I have not use any of their trading systems or strategies before, I'm not in any position to judge actually. Among the people who attended such courses, there will definitely be people who will become successful traders but I believe they are the minority.
Now this reminds me of investing. If you realize, there are trading courses being advertised online. A flip to the money section of the Straits Times and you can probably see that quite a lot of advertisements in that section are promoting trading courses. So far, I hardly come across any investing courses yet. Perhaps investing is not as appealing as trading ? Anyone wonders how did Warren Buffett ends up as the 2nd richest person on this planet currently ?
Posts
Hi Kay,
ReplyDeleteI have to agree totally that I've seen countless ads on people trying to sell their trading systems via online for a mere wager, which i felt if it's that effective, they would have use it to build up their own riches, why bother to share right? I have always been skeptical with such ads! Nonetheless, thanks for posting this useful info for newbies like me to read. I agree with your sentiments that the traditional way of learning to invest is to do more reading..just like Warren Buffett!
Hi Barack,
ReplyDeleteFurthermore, I suppose investing requires patience. I reckon not a lot of people will take time to read and understand books on investment and wait a few years to reap returns on their investments. Perhaps, that's another reason why trading courses seem to be popular.
Kay
Hi Kay,
ReplyDeleteCan I seek your advice on this please? I'm a POEM user and recently I received an invitation from PhilipsCapital to attend a ETF seminar at SGX. The program highlights include Lyrox ETFs, trends etc. What is your opinion on this? Where and how do you think I should start with Investing? Thanks.
Barack
Hi Barack,
ReplyDeleteI think it will be good to go to the ETF seminar to gain new knowledge and insights. Perhaps, you can put in your capital in to purchase the STI ETF or the DBS STI ETF 100. Meanwhile, you can read up more on investing. Once you have more knowledge and done research on the individual stocks, you can put some of your capital in individual stocks to start off with. If you can beat the index over a long period of time, perhaps it will be more beneficial to invest in individual stocks. Otherwise, it will be better to just leave your funds in a ETF.
Hi Kay,
ReplyDeleteThanks for your invaluable feedback. I will start off with reading investing books to gain knowledge and skills.
I apologised for my countless queries rained on you. Thanks for your time and patience.
Hi Barack,
ReplyDeleteI'm glad to be of some help to you.
Hi,
ReplyDeleteI have attended many previews. I felt AsiaCharts & AchieverLife trainers look honest and sincere. Anyone have attended care to share? I am not sure should I learn Options Stock Trading or just Stock trading as well. Just asking, is intra day trading available for Stock or Options Stock trading?