Retired policeman realises there's no such thing as a cast-iron bet on stocks

PUBLISHED : Sunday, 12 October, 2008, 12:00am
UPDATED : Sunday, 12 October, 2008, 12:00am

During his 33 years in the police force, Lam Cho-lam always believed he was insulated from any economic recession.

The civil service, he reasoned, guaranteed him an 'iron rice bowl', a job which would provide no matter what the economic conditions. Recessions could never touch him.

'I was not really affected as I knew my job was secure. Of course, I did make some passport arrangements for my children during 1989.

'Many of my colleagues left Hong Kong, but I did not think of leaving Hong Kong, and also my job.'

The 63-year-old never imagined that the falling economy would affect him in retirement either.

'I always thought that with the interest from my lump sum pension gratuity and the monthly pension, I could sustain myself and my family comfortably,' Mr Lam said.

He worked hard in his police career, always looking forward to his pension at the end.

Mr Lam retired in 2001, and was paid a lump sum pension gratuity of HK$2 million.

However, with an interest rate of only 0.1 per cent for the lump sum, he realised he had to do something more with his money.

Mr Lam began his journey into investments.

First, he bought bonds, and then moved to stocks.

'The bank asked me to buy bonds. Then a few years later, I started to buy shares,' he said.

Mr Lam put HK$1 million into investments. After retirement, his daily routine included morning tea, during which he exchanged views on stock market and volunteer activities.

'Talking about stocks during morning tea was a regular activity. But since the market started to fall, we have had no topics to discuss. Fewer people come for morning tea, and the first statement is usually something like, 'I lost HK$100,000 after I woke up this morning'.'

Although his mood these days is not as bright as when the stock market was booming, Mr Lam comforts himself by spending more time on volunteer activities to 'try to forget what is happening'.

'We people from the disciplined services are trained to be target-oriented and work with discipline.'

However, when asked if his disciplinary training had any effect on his investment activity, Mr Lam admitted it had not.

Despite having lost HK$300,000 in the market slump, he spent another HK$70,000 buying shares in mainland banks.

He comforted himself in this way: 'I might not get back the money myself, but I can leave this to my children.'

And another comfort? 'My son has joined the civil service,' he said.