With inflation at 3-5% and interest rates at 1+% or so, we are looking at a definite loss of 2 to 4% loss in money value every year. On the other hand, there are good companies listed in sgx and other bourses that can stand the test of time. Their share values may decline during economic downturns, but they always bounce back when the economy recovers.

The other thing to note is investing does not equate to trading. I would not recommend my son to trade but to invest with a long term view. He quite liked the examples I shared with him about the shares I bought some 25 years ago which became "free" shares because the dividends I collected all these years already exceeded what I have paid for them. Only problem he pointed out was that the shares prices seem to be high now.

I told him that if company pays 5% in dividend every year, over 20 years, the shares would become "free" shares, meaning that he would have recouped his initial investment. Does it therefore matter if the shares go up and down in the meantime? As long as the company does not go bankrupt, he would continue to receive dividends for life and still own the shares for free!