Stocks continue to rise, why can't many investors still 'return to shore'?

After a series of consecutive days of growth, the VN-Index increased by nearly 180 points in August, although many investors said they still could not recover their losses.

Explaining this phenomenon, Ms. Hoang Viet Phuong, an expert from SSI Securities Corporation, analyzed: Normally, in foreign countries, when the market goes down, investors will choose stocks to buy because the price is low at that time. But when the market goes up and has guaranteed profit, investors will sell to take profit.

However, in Vietnam, this trend is somewhat reversed, because the psychology of Vietnamese investors is a herd mentality. When stocks go up, many investors are afraid that the price will continue to increase, so they rush to buy. This pushes the price up even more, so the risk is very high. On the contrary, when the market falls, with a pessimistic mentality, they are afraid of losing more and more, so they rush to sell to take profits, causing the market to fall even more, causing even heavier losses.

Therefore, many investors fall into the situation of losing more and more the longer they play. The recommendation for these investors is to always consider and calculate the cash flow in and out appropriately to minimize the risk to the lowest level.

The SSI expert also admitted that this year is a somewhat special year for the Vietnamese stock market.

“We also do not have any scenario predicting a strong increase in the stock market like this year. People are always very skeptical, so the amount of money entering the market from professional investors is not much because they have been shocked by the past and are very careful. Only new or small investors are pouring a lot into the market. This shows that many large investors are staying out of the game, so even though the market is increasing, not everyone will make enough profit to make up for the long period of investing in losses,” Ms. Hoang Viet Phuong added.

Further analyzing the reasons, Mr. Dang Tran Phuc, Chairman of the Board of Directors of AZfin Vietnam Securities Joint Stock Company, said that although the stock market has increased very strongly in recent times, it has not increased evenly but only focused on increasing in certain groups of stocks, so not everyone has made a profit. In addition, investing in potential stocks at this time is buying at the top, the risk of facing risks will be greater than the profit.

"Moreover, in the context of a volatile market, many investors have the mentality of only investing when there are strong increases. The unreasonable cash flow and uneven market growth have caused investors to invest a lot but not make much profit," said Mr. Phuc.

Mr. Nguyen The Minh, Director of individual client analysis, Yuanta Vietnam Securities Company, commented: There are many reasons why stock investors still lose money when the market goes up, including 2 common mistakes that need to be avoided.

The first is the FOMO (fear of missing out) mentality that makes investors forget about risks and rush into the market at high-risk times. Chasing hot stocks with the expectation of a short-term correction and continued growth can lead to great risks.

History shows that hot stocks often have difficulty sustaining their strong gains. Instead, investors should consider the risk-reward ratio, especially when the risk level is currently dominant in the short term.

Stocks are up but many investors have not yet "returned to shore". (Illustration photo).

Second, investors are losing money mainly because their portfolios are focused on stocks that have not recovered, such as exports or industrial real estate, since last April.

Their biggest mistake is the lack of flexibility in restructuring their portfolio to take advantage of the market's growth, or due to risk concerns, they miss opportunities from leading stock groups.

For these investors, instead of cutting losses hastily to chase hot stocks, they should continue to hold stocks with recovery potential. At the same time, they should avoid FOMO on stocks that have increased strongly, but should wait for a better discount opportunity (price adjustment) before buying.

Which stock group should I choose at the end of the year?

Mr. Dang Tran Phuc said that letting stock investors "return to shore" depends entirely on thinking and calculation.

“The mindset of Vietnamese investors has not changed. When the market is cheap, they do not buy, but when the market price increases rapidly, liquidity will increase. It is similar to investing in gold, when the price increases, they buy more money. If this situation continues, investors will always be losers,” Mr. Phuc warned.

Mr. Phuc also predicted that from now until the end of the year, banking stocks will still be attractive and securities stocks will still be a strong speculative group.

“In addition, the industrial real estate group is quite good but prices have not yet returned to the level before the US tariff policy was issued in April. The retail group also has the potential to explode,” Mr. Phuc said.

According to Mr. Nguyen The Minh's analysis, the market has just experienced a strong increase, leading to a clear differentiation between stock groups. Some stocks have reached new peaks, while many other groups such as export or real estate have not yet recovered from the peak in April (when VN-Index plummeted due to tariff information). In particular, in groups of stocks that have increased rapidly, margin pressure can lead to the risk of a strong correction if these stocks are sold by investors to take profits.

Therefore, the upcoming increase may not be as uniform as the recent one. Stock groups that have not increased strongly and have potential such as banks, securities or industrial real estate may have a chance to break out, while groups that have increased rapidly may lose their appeal.

“Not all banks in the banking group have increased and have investment expectations, because in the past, some codes have not fluctuated, while others have continuously increased. Therefore, investors need to compare, evaluate, and analyze to choose and invest accurately,” said Mr. Minh.

Ms. Hoang Viet Phuong gave a rather cautious assessment when she said that this year there are many new dynamics so it is very difficult to predict the wave.

" There are stocks that have been inactive for 3-4 years but now they are rising very strongly. Therefore, investors should observe carefully, it is very likely that the market will not have a strong explosion like in the past," Ms. Phuong predicted.

PHAM DUY

Source: https://vtcnews.vn/chung-khoan-lien-tuc-tang-vi-sao-nhieu-nha-dau-tu-van-chua-the-ve-bo-ar962320.html