Bangkok: The president of the Thai Financial Planners Association has highlighted that gold is now a high-risk asset for retail investors, as less than 3% of Thais engage in financial planning. He suggested that the Thai stock index, currently below 1,200 points, presents an attractive valuation. Investors are advised to adjust their portfolios by reducing high-risk assets and diversifying investments both domestically and internationally, while monitoring the outcome of Thai-US negotiations.
According to Thai News Agency, Mr. Wiroj Tangcharoen, President of the Thai Financial Planners Association, stated that Thailand is facing a period of high prices and economic volatility, exacerbated by global economic instability stemming from the US trade policies. The recent announcement by US President Donald Trump regarding high import taxes on goods from all countries, including Thailand, poses potential risks to the Thai economy, which has already experienced slowed growth due to the COVID-19 pandemic and a major earthquake in the country. He emphasized the importance of personal financial planning for Thai citizens, recommending measures such as reducing unnecessary spending and spreading investments across multiple asset classes.
Mr. Tangcharoen also addressed the impact of macro-economic factors, like Trump’s import tax policy, which has introduced volatility in both stock and bond markets. He advocated for asset allocation to mitigate risks, advising a reduction in high-risk assets by 10-20% and increasing the proportion of low-risk assets and cash holdings. This strategy would position investors to take advantage of opportunities when the price of risky assets declines due to US import tax policies expected to take effect mid-year.
Regarding the Thai stock market, Mr. Tangcharoen noted that the current index level of 1,100 – 1,200 points offers an appealing opportunity for investment despite global market volatility. He advised waiting for outcomes from Thai-US negotiations and potential impacts from US-China trade tensions before making further decisions. Moreover, the announcement of the Thai ESGX fund is anticipated to invigorate the capital market.
On the topic of gold, he cautioned retail investors about its increased risk due to price fluctuations. For those already holding gold, he recommended limiting it to no more than 15% of their investment portfolio and advised newcomers to keep it under 5%, focusing on dollar-cost averaging (DCA) strategies. Nonetheless, for fund investors, gold remains a relatively safe asset.
Mr. Tangcharoen also pointed out a common misconception among Thai people that financial planning services are only for the wealthy, resulting in low utilization rates. Despite a rise in service use, less than 3% of Thais currently practice financial planning. The association advocates for financial planning as a tool to manage and mitigate potential risks to assets and income, emphasizing a proactive approach to financial stability.