'Stock Market gives better return on people's investments than banks'

Nalaka Godahewa

By Lynn Ockersz

'Do not confine yourselves entirely to the banking system. The Stock Market has always given you a better return on your investments and it would be advisable for you to invest some of your hard-earned money in the Stock Market, with a full knowledge of the money-earning opportunities it opens out regularly, rather than invest all your moneys in the banking system, which today offers investors very low interest on their investments.'

Thus said Securities and Exchange Commission of Sri Lanka chairman Dr. Nalaka Godahewa, when asked by The Island Financial Review during an interview recently, what advice he has to offer retired personnel who are usually prone to deposit their lifetime savings in mainly the banking system and depend on the interest these investments bring for their daily sustenance.

'From being around 20 percent at one time, bank interest is down to 10 percent or thereabouts. This is slightly above the inflation level and would hardly prove adequate in meeting current living costs. On the other hand, wise investments in the Stock Market would bring substantial returns which would enable a retiree to live comfortably, the SEC Head explained.

'However, it is important that a prospective investor in shares refrains from making rushed decisions. First, he or she must study market opportunities carefully. Moneys must be invested judiciously after some time spent studying the market openings that would yield the best returns. I would also urge potential investors to invest some of their savings, and not all of it, at first, in the Stock Market and assess the progress before making huge investments, the SEC chief added.

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