How to manage the portfolio after the stock market purge?
Talk in Talk show Financial Street (The Finance Street) on VTV8, experts assessed that, after the purification process of the regulator, the market has not had an immediate breakthrough in the short term, but Investors can hold stocks well in the long term, and the optimistic results are forecasted to take place by the end of this year.
Answer about whether the market overreacted during the recent volatility, when initially small-cap and speculative stocks fell sharply, but then spread to large-cap stocks, with a strong background. With good fundamentals, Mr. Le Duc Khanh, Director of Analysis of VPS Securities, said that the number of individual investors has increased a lot from the beginning of 2022 to now.
However, when the situation started to get more difficult, from deals and events that could be said to be relatively negative, affecting investors’ psychology made them start to falter and become exhausted. After that, the market had correcting signals, cash flow started to withdraw from many stocks from speculative stocks and then gradually spread to many other stock groups, from bluechips, midcaps to penny stocks.
Mr. Le Duc Khanh, Director of Analysis of VPS Securities and Mr. Ho Quoc Tuan, Senior Lecturer, University of Bristol, UK.
In fact, much of it is due to investor psychology because there are still groups of businesses with breakthrough business results in the first quarter of 2022 such as fertilizers, nitrogenous fertilizers, seaports, chemicals or including technology groups, financial stocks, securities, even telecommunications industry…
In fact, most investors are often interested in the story of the stock price going up, and then buy excitedly in the style of the crowd effect. And they care little about the basic quality story, whether the pricing is appropriate or not, and then they have to hold on to it, which leads to such irrational behavior.
This type of investment leads to a lot of buying and selling, a lot of short-term transactions, as well as a stock portfolio that is always 6, 7, 8 stocks like shopping, leading to good stock holdings. , bad luck, they also don’t know how to behave and manage the portfolio, so it leads to low investment efficiency.
Agreeing with Mr. Khanh, Mr. Ho Quoc Tuan, Senior Lecturer, University of Bristol, UK also said that the current psychological problem is one of the key issues of the market.
“However, I observe two other factors. The first is the factor of investors using a lot of margin, leading to margin calls and having to sell off mortgages. This process combined with market liquidity is also shrinking, making the market decline faster. This is a problem for most markets, not just Vietnam.
In every market there will always be periods when investors are very excited and market liquidity is very strong; there are periods when the cash flow is not much and then people sell a lot and it creates the effect of selling not only speculative stocks but also good stocks, even if doing well, they are still affected.
At the same time, rumors also create difficulties. If looking at the long-term, I think this adjustment is good, then the money will come back in“, said Mr. Tuan.
Is the market at a good time for investors?
Mr. Ho Quoc Tuan said that if it is said that this is a good time to buy stocks, it must be determined that investors want to buy shares and hold for how long. If investors take a short-term view in a month or two, many factors are still uncertain right now.
Internationally, the Fed in May is expected to raise the basic interest rate by 0.5%, creating an interest rate risk. In addition, some foreign investment funds are now in a situation where many investments need to be borrowed to mature.
The second is the risk on the part of China, currently they are still facing the Covid-19 epidemic in their country and have to blockade many cities, including the major financial and economic center of Shanghai.
That leads to many problems, including economic growth, the global supply chain, and the third is that the pair of USD and Japanese Yen has increased sharply, potentially causing the currencies of other regions to increase. Developing countries may also experience a sharp depreciation against the US dollar. In particular, not to mention how the story in Ukraine will develop…
But if we look at the longer term, like looking at the end of 2022, the perspective will be brighter. Because the Fed has raised interest rates 4 times, 5 times or even 7 times, then in historical terms, interest rates will still be at historic lows until the end of 2022.
If so, the stock price will still be able to continue to increase, because when interest rates are low, people do not have many options but have to choose to invest in a certain investment channel. Stocks are one of the lucrative investment channels and so is investing in a good business.
“For a longer-term perspective to the end of 2022, I think this is a good period to invest and we see Vietnam having a valuation that many consider reasonable for foreign investors to buy. into the long-term outlook.
Vietnam has the advantage of having a relatively stable political system, thus creating conditions for foreign investors to have more confidence. The proof is that we see that FDI is still coming in and foreign investors are buying Vietnamese stocks in the past month“, said Mr. Tuan.
Fully equipped with knowledge, learn new financial tools
Mr. Le Duc Khanh assessed that there are still many stocks in the market that meet the standards, the price is very large at a price that is completely acceptable to us and is a very profitable investment opportunity. good, especially in the context that it is difficult for us to find an investment channel that is more attractive. Therefore, this period is suitable for investors with longer-term vision.
“I think the point this year is that we defend well and then we have a good attack. A good defense is that we will administer a truly safe and prudent portfolio.
Investors, both individuals and institutions, besides we need to know stock market The basis is natural, but we also need to cultivate more knowledge so that we can better understand what a derivative is and what features are when we use this derivative to hedge our portfolio. base contract.
Besides, we modern investors also have to learn and learn new financial tools to be able to make our investment activities more effective. The group of investors with a longer-term nature can hold 3, 6 months, 1 year or longer.
The second angle, I think that every time the market enters a crisis phase or enters a major correction phase, it is an opportunity for us to hunt for reasonable and attractive discount opportunities.“, Mr. Khanh gave advice.
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