Lessons from the inside

A long-time member of the Securities and Exchange Commission outlines her own conservative approach to savings and investment

While officials at the Securities and Exchange Commission (SEC) are prohibited from directly trading or investing in stocks, assistant secretary-general Duangmon Chuengsatiansup has chosen to put all of her investment in provident and equity funds as a vote of confidence in the Thai capital market.

People shop for mutual fund products at a recent fair in Bangkok. A savings culture is increasingly taking hold in Thailand. SOMCHAI POOMLARD

"We are allowed to invest in equities indirectly through equity funds," she said.

The ban on direct stock trading by officials is aimed at avoiding conflicts of interest, as the SEC has the duty of regulating trading.

Mrs Duangmon has worked at the SEC since 1992, when she moved from the Bank of Thailand. By nature, she does not love stock investment. She began investing in stocks when she joined the SEC but is very conservative.

In the early days, most of her money went to help her parents pay for expenses at home and for educational fees for her brothers and sisters.

"My saving started with insurance," she said. "Every time I borrow, I buy an insurance policy with the sum insured equivalent to the principal of the debt. I'm the family's pillar, and I don't want to put the family in trouble if I die."

Her first insurance policy had a sum insured of 800,000 baht, equal to the amount of a home loan she obtained from the office's welfare programme.

"While most of my monthly salary went to pay the home loan, I felt insecure with no freedom, as the insurance money was so tiny," she said. "Then I made my priority saving more money and working harder to build the family's long-term savings."

Mrs Duangmon worked as a lecturer for additional income to cover her monthly expenses and loan payment.

While working at the central bank, every payday she put money into a savings account and bought Government State Bank (GSB) lottery certificates, government bonds or promissory notes issued by finance companies.

At that time, equity investment had no appeal, as she thought she had no time and little information. With interest rates of 10-20%, she was happy to put her money in bank deposits.

"Most people thought the same as me _ work hard and save _ as we are salary earners. We have no idea how to do business," said Mrs Duangmon.

Nothing changed until she moved to the SEC. She was active in educating the public about retirement mutual funds (RMFs), and that was the first time she took a hard look at her portfolio.

"All my savings were bank deposits and fixed income with no equity exposure at all," she recalled.

"A question popped into my head when I told people about stock investment. Since I did not invest in stocks myself, how could I expect other people to believe me?"

She started putting money into RMFs and long-term equity funds, no matter whether the Stock Exchange of Thailand index rose or fell.

Every month, her salary goes to savings first _ not bank deposits but rather money-market or fixed-income funds with a higher return. When the near-cash funds have a gain of more than 200,000 baht, she moves the extra money to other investments.

At present, Mrs Duangmon's assets are in equities via mutual funds (20%), government bonds and GSB lottery certificates (40%) and property (20%). The rest is in liquid assets such as money-market funds.

"Saving money is essential, as it helps us to feel less anxious when bad things happen," she said.

Four years ago, her husband was diagnosed with third-stage colon cancer and treated with chemotherapy. He now needs a follow-up every three months.

"The climate today is contaminated and risky for health," said Mrs Duangmon. "Some diseases are unable to be treated by the government's healthcare services, so we must have our own savings for emergencies."

She remains a guest lecturer after three decades, seeing that job as a way to give back to society, and donates thousands of baht to Unicef, World Vision and other charities.

"I'm lucky that I have no children," she said with a smile. "I don't have to worry about their future or inheritance. My savings goal is to make life for me and my husband trouble-free and help relatives if they need financial help."

About the author

Writer: Darana Chudasri
Position: Business Reporter