Have we become too optimistic about stocks?

[SINGAPORE] Sometime in the 1990s, a colleague at the brokerage firm where I worked gave a talk about stock investing to the frontline staff of a bank. When he was done, one of them asked what they should say to customers who lost money on a stock.

My colleague told me he responded by shrugging and uttering a glib two-word phrase that would be inappropriate for me to repeat in this column – but which meant that stocks are inherently risky and that occasional losses are unavoidable.

At the time, banks in Malaysia and Singapore were just beginning to get into the business of selling investment products. Their buttoned-down institutional culture seemed so far removed from the brash, freewheeling attitudes in the market that I wondered if they would ever be comfortable operating in this new field.