Gold, real estate, securities all good investment channels: expert

VietNamNet Bridge – Investors complain that there is no good investment channel nowadays, while experts say that the national economy is in very good condition, and all these said sectors prove to be reliable investment addresses.

The gold and greenback price increases in recent days have made people delay their purchasing deals. They find it unwise to make deposits at banks as the offered interest rates cannot offset the high inflation rate. The gloomy stock market in the last several months has been keeping investors far away. Meanwhile, the real estate market has warmed up, but there are latent risks.

However, Director of the Department for Trade Policy and International Integration Studies under the Central Institute for Economic Management CIEM Vo Tri Thanh has assured the public that all these investment channels are good in the long term.

Mr Thanh said that all international financial and monetary institutions were optimistic about the performance of Vietnam’s economy, especially, they highly evaluate the growth rate and administrative reform Vietnam has been carrying out. Therefore, with vision towards the next three and more years, investments in all these channels, securities, real estate and bank deposits, prove to be safe.

Mr Thanh said that investors should decide where to invest after considering their capability. If they have long-term capital, they should bankroll money in shares, while if they have medium-term capital, they should make investments through financial institutions, investment funds. Moreover, if they have short-term capital and do not want to face any risks, they can choose the safest kind of investment: making deposits at banks.

According to Mr Thanh, the lethargy of the stock market is just temporary, while the infrastructure system and the legal framework still cannot be perfected in its initial development. However, the situation will improve. If considering the economic potentials and the renovation process, especially the equitisation of state-owned enterprises, one should agree that the stock market will serve as an effective investment channel for many investors in the future.

Huy Nam, a securities expert, also said that where to invest should depend on the investors’ financial situation. Big investors should aim at big investment and long-term deals. These investors always strive for long-term profit rather than short-term profit; therefore, they do not give up the game right when they face difficulties or when the market falls down. Meanwhile, smaller investors should think of ‘putting eggs into many baskets’ in order to disperse risks.

Mr Nam still believes that the stock market remains the most attractive investment channel, if comparing the liquidity of securities with other commodities like gold, real estate, and savings. Explaining this, Mr Nam said that it was not so easy to sell houses or real estate projects nowadays.

“It is true that the market has fallen to its deepest low and the market remains lackluster, but people should believe that the market will recover,” Mr Nam said, adding that bank deposits or gold were only suitable for investors who had little idle capital and didn’t want any risks.

Nevertheless, Director of SJC Company Hanoi Luu Quang Dien thinks that gold should be seen as the most attractive investment channel. It is a tradition for Vietnamese people to keep gold, and gold has recently become an effective investment. The gold market was neglected at the end of 2006 and early 2007, when the stock market and real estate market heated up. However, the position of gold as an investment channel has been regained as the two markets both have become quiet.

According to Mr Dien, investors can enjoy two benefits when injecting money in gold: high liquidity (investors can restructure their investment portfolio right when they want) and low required investment capital.

The profit to be brought about by investment in gold proves to be much higher than VND, he said. The best player would make the profit of 15% every year. Meanwhile, all nations in the world consider gold as an important commodity for reserve.

He has advised amateur investors not to join the market when the prices fluctuate heavily. They should wait until the market is normal and consider the right time to buy gold.

If investors have long-term investment plans, they should buy in early summer, in March, April and May, when the prices always stay firmly at low levels. They can sell gold in the last months of the year, when the gold demand escalates. However, gold always requires long-term, not short-term investors (six months at least), and the capital for investment should not be sourced from loans.

Meanwhile, Ngo Tri Long from the Ministry of Finance’s Price Research Institute said that he would inject money in many fields so as to disperse risks and ensure expected profit.