GOLD MARKET, SECURITIES, REAL ESTATE – SHOULD BUY OR SELL?
Never had a decision to invest or sell during the covid translation period was so difficult, how was the relationship between Gold-Stocks-Real Estate, and should this time be bought or sold?
1 / The relationship between gold, stocks and real estate
Before learning about the relationship between these three types of investment, we must start with the extent to which investors in the market accept risks, each investor is an independent, caring individual. Due to different reasons as well as different sources of capital, the level of acceptance will also be very different. Investors’ tolerance for risk is generally divided into three categories:
(i) A Risk-Seeking investor is the taking of great risks and uncertainty in the investment in exchange for high returns. This is a group of investors who are inclined to find profits through the stock / Forex channel, especially in times of great market fluctuations such as Translate Covid, making the BDS market plummet, so these investors tend to Jump into the market when the opportunity arises, without much regard for whether Translate Covid has a strong influence?
(ii) Risk-Neutral Investors are a group of bladder with risk when making investment decisions often pay little attention to market fluctuations. This is a group of investors who will not distinguish when facing two opportunities with the same profit but different risks. This is a trend-following investment group – no matter what type of asset it is, it only sets expectations from here until a year later which asset class will bring higher returns.
(iii) Risk Adverse is a group of investors who tend to choose projects with similar returns but with lower risks. This is the group of investors accounting for the most in the market, the psychology of choosing the safest option, will pay less attention to profits by fear of risks, so gold and depositing money in the bank is the thought comes first.
Thus, it can be seen that the same investment source from different risk-aversion groups leads to a different investment option, the investment mechanism will also be a choice of “choosing gold, then not. Investing in securities and BDS, choosing securities will have less tendency to invest in gold and real estate and a little will spread investment spread. This makes these 3 markets both separate and closely related to each other through the mechanism of “COMMUNICATION”, when one of the three markets has a push or a compression, it will affect the remaining markets. Investors, if they choose to flow capital into the Stock market, they will have to withdraw money from other channels, or vice versa, when there is a risk, investors tend to sell assets that are highly sensitive to Markets like Securities invest in gold-banking to preserve capital.
The investment mechanism in this period is relatively clear, when risks increase (economic crisis due to epidemics, financial crisis …) people will tend to focus on investing in gold. Gold price is at a record high, however, when gold has reached its historic peak, choosing to BUY OR SELL in all 3 markets is very difficult to decide.
2 / Stock market – SHOULD BUY OR SELL.
Among the three markets, securities are the investment channel with the highest sensitivity, all uncertainties in terms of: world politics, domestic politics, domestic economy, foreign economy even variable. Social impact also has a significant influence on this market. First of all, from the viewpoint of objectively, VNI-INDEX no longer expresses the right breath of the market, sometimes it is distorted when only 4-5 large-cap stocks can change the increase / decrease of the whole. When the market measure is easily blown away by a few stocks, the story of stock price is still happening every day in the district, when the small investor is usually the baby fish in the ocean, the shark will swallow. you while you are most bloody.
The stock market in the first 7 months of this year can be summed up in one sentence “fast up and down fast”, especially when Covid’s translation has not been controlled on a large scale, the risk in this market is relatively high.
SHOULD BUY: At this stage, value investors are less concerned with risk – Risk Neutral will strongly participate in periods of the market being underestimated, for example: the period when there is a social gap VN-INDEX dropped deeply to 655 points (down more than 35%) – the market trend is not stable, so choosing the right time to buy will optimize the profit.
SHOULD SELL: when things are not under control yet, and yet to be at their peak and will even continue through 2021, we have to get used to this “New Normal” state, this is also When it is golden time to be able to keep money waiting for opportunities, when the risks are higher than the profitability, “there is still money to decide the profit / loss”. Foreign investors also withdrew more than 12,000 billion VND during the period of market instability, when you cannot decide by yourself, look at foreign investors.
3 / GOLD MARKET – SHOULD BUY OR SELL
Different from the other 2 markets – the supplementary gold market
In fact, when the world gold price peaked, the domestic gold price immediately reached the historical threshold (even faster), the race has not stopped when there are many experts in the world. The country and the world forecast that gold prices can set new highs, even reaching 70-75 million / tael, these forecasts are based on:
– The epidemic situation in both Vietnam and the world has not stopped yet and can last until 2021 – this causes great difficulties in opening up the economy – a safe haven when there is a risk. just gold.
– Political instability and trade wars between major nations – especially during the Covid Epidemic period – Donal Trump issued a ban on TikTok and Wechat in the US market affecting a series of related technology companies. However, this has led to increasing political / economic tensions between these two powers.
– Capital flows pumped into major economies – causing inflation and currency prices will decrease over time – of course finite gold will increase in price.
SHOULD BUY OR SELL: Objectively, the gold market is in OVER BUYING, the market is perceived as rising too quickly and being overbought – now falling into a state of HOLD, DON’T PURCHASE. The biggest downside of this market is that if super-rich investors choose gold to invest, it is quite difficult because there may be a need for safe storage in large quantities….
4 / Real Estate Market – SHOULD BUY OR SELL
According to recent statistics of Batdongsan.com.vn in the period 2010-2020, housing prices in the two major cities Hanoi-Ho Chi Minh increased by 2-3 times while the price of gold and stocks only increased in about 25. % -45% can be seen in the long term, real estate is an investment channel that can bring the highest profit value.
Looking back on the real estate market in June-July-August 2020, investors took advantage of opening and offering to the market a relatively large supply mainly concentrated in the eastern market with more than 12,000 properties. New products are launched and also set up a new price level in areas (District 9, Binh Duong, Long Thanh …). This is almost contrary to the psychology of waiting for prices to fall or bubbles will happen, the fact that real estate is also a safe haven and has good profitability, so regardless of market fluctuations, the Investors are still confident to open for sale during this period. There are 2 main factors influencing the decision to launch a sale during this period:
(1) Supply is scarce: in the period of 2018-2020, projects in Ho Chi Minh market are really scarce due to complicated and incomplete legal procedures, investors have to carry money to invest. satellite areas – which is easier in legal terms, when CDTs in Ho Chi Minh go to battle the provincial market immediately create a new price level.
(2) Cash flow: almost the first 6 months of the year, investors started to breathe oxygen, even a real estate company listed on the stock market, 6-month revenue was very modest at less than 100 billion … the cash flow is not enough forcing investors to immediately sell products with immediate cash collection.
In a nutshell, the market at this stage is still relatively complicated, only when new cash flow is needed, so to sell the rest historically, real estate is still a residence channel and generates great profits in the future. Because of the massive investment as before, choose the right product to INVEST IN THE SEASON.