I'm completely new to the stock market and have only recently become interested. My main job is office work, so I can't dedicate all my time to following the market. I think a cautious, steady investment approach suits me.
Experts, please advise: is now a good time for a newcomer like me to start investing?
Diem Pham
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Investors monitor market information at a brokerage firm in Ho Chi Minh City. Photo: An Khuong |
Investors monitor market information at a brokerage firm in Ho Chi Minh City. Photo: An Khuong
Expert advice:
Currently, popular asset classes like gold, real estate, savings accounts, and stocks each have unique characteristics requiring careful consideration. Gold prices are high, posing short-term volatility risks. Real estate liquidity remains limited, demanding substantial capital and long-term holding. Meanwhile, savings interest rates below 5% annually preserve capital but don't optimize asset growth amid inflation and potential exchange rate increases.
Therefore, stocks become a worthwhile investment channel, offering capital flexibility and potential medium to long-term asset growth with the right approach. In the 25 years since its first trading session, the Vietnamese stock market has become more stable and transparent after various fluctuations. Starting now with a clear investment strategy is therefore viable.
Your investment consideration comes as the VN-Index reaches record levels. In the past two weeks, liquidity has doubled compared to the beginning of the year, averaging 45,000 billion VND per session. The VN-Index has also risen over 25% since the start of the year while savings interest rates remain low.
However, the overnight interbank interest rate at the beginning of 8/2025 stands at 6.6%, signaling rising capital costs. This creates short-term market volatility risks, potentially shifting capital towards other asset classes.
Pinpointing the perfect market entry timing is difficult. I recommend a phased capital allocation strategy. This involves dividing your total capital into smaller portions and investing them gradually rather than all at once. This strategy aims to minimize risk during market fluctuations and capitalize on various investment opportunities.
For example, if you have 50 million VND and want to buy stock A at 50,000 VND per share, without phased allocation, you would buy 1,000 shares. However, with this strategy, you could initially invest 30 million VND to buy 600 shares. If the price drops to 40,000 VND, you could buy 500 more shares with the remaining capital.
By not putting all your eggs in one basket, you mitigate the negative impact of market fluctuations on your total investment. When the market corrects, you can invest further to acquire stocks at better valuations. This strategy also prevents impulsive decisions during significant market swings, especially declines.
While limiting risk, this strategy may not always yield the highest returns. Additionally, dividing capital leads to more transactions and higher fees.
Consider these approaches based on your time and initial capital: : Firstly, if you can invest full-time, build a strong knowledge base, research companies thoroughly, and collaborate with advisors whose investment methods align with your risk tolerance and goals.
With limited time, partner with reputable advisory firms for timely investment opportunities and market analysis, saving research time. If lacking time or knowledge, start with mutual funds (small capital) or professionally managed portfolios (large capital). Both offer expert teams to build optimized stock portfolios without constant market monitoring.
Ngo Thi Thao Nguyen
Head of Investment Advisory
FinSuccess Investment Joint Stock Company
