According to the Vietnam Securities Depository (VSD), as of the end of August, there were 10.75 million securities accounts nationwide. Individual investors accounted for 99.37% of this figure, significantly outnumbering domestic and foreign institutions. However, up to 95% of these individual investors experience losses and leave the market after about two years.
Speaking on the "Personal Finance" podcast series on VnExpress, Vo Van Huy, Head of High-Net-Worth Clients at DNSE Securities Company, stated that the biggest weakness of individual investors is their psychology. Many people enter the market based solely on stock tips from social media groups or circulating rumors.
According to Huy, some financial rumors, such as dividend distributions, share issuances, and bonuses, can be assessed for feasibility through corporate shareholder meetings and financial reports. However, qualitative factors like development plans depend on individual personalities and strategies.
With 10 years of experience in the industry, Huy suggested the 4 and 3 investment tactic: basing investment decisions 40% on the market's macroeconomic outlook, 30% on the industry, and 30% on the specific stock. Investors should consider making a decision when at least two of these three criteria are met.
Hesitation to cut losses is another mistake that hinders investment effectiveness. The principle behind cutting losses is capital preservation. "Investing is like gardening. Not every investment will be a beautiful flower. Some stocks will grow, while others won't. The investor's job is to stop small losses early before they become large ones," Huy emphasized.
Along with the rule of cutting losses, Huy also advises investors against selling too early to avoid later regret. To identify selling points, investors should consider signs like market saturation, broken growth trends, relevant market and industry factors, and price movements.
Huy also explained that investing solely in well-known companies is risky. Even professional investors find it difficult to accurately predict a company's performance, making such assessments even more challenging for individual investors, not to mention legal factors.
He stated that a company's stock growth depends on internal factors like sound finances, growth potential, leadership, and price trends. Therefore, besides brand recognition, individual investors should consider financial data, industry potential, and especially the people—the business owners.
According to the DNSE expert, in a market where emotions easily override reason, the advantage lies with investors who have a clear method and consistent discipline. Understanding the macroeconomic picture, the industry, the company, and oneself serves as a filter to preserve capital and promote more sustainable profits. Furthermore, patience and persistence are crucial for maintaining investor confidence.
Anh Vu
