The market enters a new phase, higher requirements for investors
The change in the stock market along with the impact of technology, especially AI, is forcing investors to shift from a subjective approach to systematic, disciplined and longer-term thinking.
On April 7, the Center for Scientific Research and Training in Securities in coordination with SSI Securities Joint Stock Company organized the conference "New Thinking in Securities Investment" in Hanoi, with the participation of a large number of individual investors, especially young investors.
Speaking at the opening, Mr. Ha Duy Tung - Vice Chairman of the State Securities Commission - emphasized that the stock market is playing an increasingly important role in the economy, not only a capital mobilization channel for businesses but also an attractive investment opportunity for people.
In recent years, the force of individual investors, especially young people, who are dynamic and quick-witted with new technologies and trends. However, according to Mr. Tung, this is also a group of people who are easily exposed to risks due to lack of experience, knowledge and are easily influenced by crowd psychology.
“Intentional investment, lack of understanding of laws and market operating principles can lead to unfortunate consequences. Therefore, equipping young investors with knowledge, skills and raising awareness is very necessary,” said Mr. Ha Duy Tung.
On the side of securities companies, Mr. Nguyen Duc Thong - General Director of SSI Securities Joint Stock Company - said that the Vietnamese stock market is entering a new stage of development, not only changing in scale but also changing in nature.
One of the important factors is that the market was upgraded by FTSE Russell to a secondary emerging market after many years on the tracking list. It is estimated that about 1.7 billion USD of passive capital from global ETFs could flow into the market, pulling in active capital from international investment institutions.
When the market steps up to a new level, the way the market operates will also become more efficient and professional - from pricing methods, analysis methods, to risk management methods. The playground is wider, the opportunities are greater, but the requirements are also higher," Mr. Thong said.
In that context, individual investors cannot continue to rely on emotions or unverified information, but need to build a solid knowledge base and systematic investment methods.
Advantages in thinking and discipline
According to Mr. Nguyen Duc Thong, a breakthrough change today is the development of artificial intelligence (AI), which helps individual investors access and analyze large amounts of data at a low cost - something that previously only large organizations could do.
However, as the gap in tools is narrowing, the competitive advantage in the market no longer lies in who has information earlier, but lies in the ability to understand the nature, select information and maintain discipline in making decisions.
We are living in a time when the market is changing, technology is changing, and cash flow behavior is changing. Any investor who stops learning will be left behind" - Mr. Thong assessed.
Agreeing with this view, Mr. Ho Huu Tuan Hieu - Investment Strategy Expert at SSI - said that in the past 10 years, the Vietnamese stock market has developed very quickly in terms of both scale, information quality and professionalism.
However, this also makes the market increasingly "difficult". "To go ahead of the market is very difficult, but to keep up is already a big challenge" - Mr. Hieu said.
According to him, one of the common mistakes of young investors is approaching the market with the mentality of "losing then stopping", especially when the capital scale is still small. However, whether the amount of money is large or small, investment still needs to be carried out in a principled manner, balancing expectations and risks.
Long-term expected yield 10–15%
Sharing about profit expectations in investment, Mr. Ho Huu Tuan Hieu said that if calculating the market average, including dividends, the profit of the Vietnamese stock market in the past 10-15 years has fluctuated around 13–14%/year, relatively similar to or higher than nominal GDP growth.
In the context of Vietnam setting higher growth targets in the coming periods, nominal GDP growth may reach 14–15%, thereby creating a basis for expecting stock market yields to be above 15%.
However, he also noted that this is the average level of the market, and the investment efficiency of each individual will depend on specific strategies and actions.
Meanwhile, Mr. Trinh Van Dien - Deputy Director of the Center for Scientific Research and Training in Securities - said that investors need to place expectations based on comparisons with other investment channels.
Currently, bank deposit interest rates are about 6–8%/year, government bonds are about 9%, while corporate bonds can reach 12.5-13.5%. Therefore, with higher risk characteristics, stock investment needs to have higher expected returns than these channels. According to him, if calculated in the period of about 10-15 years since 2012, a long-term yield of 10% or more is acceptable.
For me, if stock investment reaches over 10%/year, it is already achieving the target. The level of 15-18% is suitable for the specific characteristics of stock investment, but it is necessary to look at a long cycle, because there are years of high profits but also years of losses" - Mr. Dien shared.
