Last week, the VN-Index increased by 6%, closing the week at 1,584.95 points, this is the week with the best increase since the end of 2022.
Although the increase was in all 5 sessions, the adjustment process also appeared in some sessions last week. However, the market has overcome profit-taking pressure from the huge amount of goods in the account. The VN Index has continuously broken historical peaks and is gradually approaching the 1,600-point mark.
Notably, foreign cash flow has shown signs of stagnating in the past 2-3 weeks, however, the cash flow of individual investors has returned to the market very strongly.
The market can successfully reverse the index because new cash flow is still flowing into the market, the average liquidity of the whole market is still setting new highs: liquidity in July was about 39,000 billion VND, in the first sessions of August it increased to 54,500 billion VND, even the market has absorbed well the sessions with over 80,000 billion VND in goods in the account.
There were successful cash flow market sessions, Midcap stocks were the group that increased strongly while VN30 decreased slightly. This is also an indicator of the shift in cash flow in the group of stocks increasing strongly in the VN30 to the group of small and medium-sized stocks.
Dr. Nguyen Duy Phuong, Strategic Investment Director of DG Capital, assessed that the market is in a positive uptrend. If any, the adjustments are also quickly overtaken by the market, even in the session because liquidity is at a record high and far exceeding the previous peak. In the short term, adjustments are also necessary to help the long-term increase be more sustainable and investors who are holding money outside have the opportunity to participate or investors who sell early and lose goods can also return.
"Regarding the shift trend of cash flow showing signs of shifting to small and medium-sized stocks, increasing the proportion of this group of stocks is also a strategy that should be paid attention to. This strategy is associated with the context that although the market still maintains its upward momentum but the increase range is no longer as strong as in the recent past, it will be a suitable strategy. The taste of the group of individual investors is that midcap stocks have strong fluctuations, so cash flow will tend to spread to the midcap group in the coming time", Dr. Phuong stated his opinion.
However, in any market uptrend period, there are always periods when the market can suddenly adjust deeply. During the 2020-2021 increase period, the market had 2 deepest corrections of about 15% per correction, in which many highly volatile stocks could decrease by 30% in these corrections.
For investors with positions from lower regions when the VN-Index is in the 1,300-1,400 zone, they can rest assured to hold stocks because the market has just begun to increase.
For investors participating later, it is necessary to prepare for unexpected corrections and ensure a safe ratio for the account during the adjustment phase to have the opportunity to increase the proportion of stocks in the account when the corrections confirm the end.
