In the trading session on July 23, VN-Index continued to surpass the 1,500-point mark, closing above 1,512 points and approaching the historical peak of 1,534 points set in January 2022.
Money is still pouring into the market, despite warnings of rising risks and an increased probability of a short-term correction. However, the market is still seeing "strange" things happening as many investors' accounts are still in the red, some have been losing money since last year and have yet to find a way to "return to shore".
Reporter of Nguoi Lao Dong Newspaper had an interview with Mr. Nguyen The Minh, Director of Analysis for Individual Clients, Yuanta Vietnam Securities Company, about market developments and the story of why investors still lose money when the market goes up.
Is the market overheating?
Reporter: VN-Index has been continuously increasing strongly, far surpassing the 1,500 point mark without any significant adjustment. Is the market overheating and is it too risky for investors to participate in the market at this time, sir?
- Mr. Nguyen The Minh : There are risks in the market at present. In fact, we also warn of the short-term risk of the VN-Index adjusting down in the last few sessions. Because technically, many stocks have fallen into an "overbought" state after the recent strong increase. When the market reaches this state, the pressure to adjust is often very large. If groups of stocks are "overbought" at the same time, the market may need time to cool down. Therefore, the possibility of "shake-ups" or strong adjustments is very high.
Stock market continues to rise despite warnings of overheating
Second, in terms of valuation, the VN-Index is currently trading at a P/E of approximately 15 times, reaching the historical average. In the context of July being the time when businesses announce their second quarter business results, the market may witness a differentiation between stock groups. Initial data shows that the profit growth rate of some businesses is not commensurate with the strong increase in stock prices, creating a risk of correction when valuations increase too quickly compared to actual profits.
Some opinions are also concerned that the margin ratio (outstanding debt borrowed on margin to buy stocks) is too high. What is the reality?
- The margin issue at some securities companies is also a risk. Although the total margin size in the whole market is not yet worrying, some large securities companies have reached or are close to reaching the margin ratio threshold according to regulations.
In particular, in hot stock groups such as Vingroup or Gelex , margin pressure can lead to the risk of strong correction if these stocks are sold by investors to take profits.
So investors still need to be cautious?
- That's right! Because the market has just experienced a strong increase, leading to a clear differentiation between stock groups. Some codes have reached new peaks, while many other groups, such as exports or real estate, have not yet recovered from the peak in April 2025 (when the VN-Index plummeted due to tariff information).
Therefore, the upcoming increase may not be as uniform as the recent one. Stock groups that have not increased strongly, such as banks, securities, or industrial real estate, may have a chance to break out in the near future, while groups that have increased rapidly such as Vingroup or Gelex... may lose their appeal.
VN-Index reaches historical peak of over 1,500 points
Reasons why investors lose money
Many investors have sold and are holding cash from the 1,400 point area. Is buying now risky as you analyzed above?
- There are two common mistakes to avoid at this time. The FOMO (fear of missing out) mentality makes investors forget about risks and rush into the market at a time of high risk. Chasing hot stocks, with the expectation of a short correction and continued growth, can lead to great risks.
History shows that hot stocks often have difficulty sustaining strong gains. Instead, investors should consider the risk/reward ratio, especially when the risk level is currently dominant in the short term. Only enter the market when the discount is attractive enough.
Why is VN-Index far above the 1,500 point zone but many investors are still losing money? What will be the strategy now?
- Investors are losing money mainly because their investment 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, especially when the tariff risk may decrease in August. 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.
Source: https://nld.com.vn/chuyen-gia-ly-gia-nhung-chuyen-la-doi-khi-chung-khoan-lien-tuc-lap-dinh-196250723145926049.htm
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