Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?

Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?

Last updated: Monday, November 30, 2009 |
Lao Dong was at a conference where various experts argued about where Vietnam’s groggy investors ought to put their money, if they still have any.



Stocks, gold, real estate or dollars – what’s best for Vietnam’s investors?

All investments are risky

The gyrations of the world gold market recently have helped many Vietnamese earn a fortune, but at least as many others have been cleaned out. Amateur investors are conspicuous in the latter group, having plunged in without good market information and all too often placing their bets with the help of dreams and horoscopes.

Nguyen Minh Tri, Director of Agribank’s Gold, Silver and Gemstone Company said that investors on the gold trading floors rarely ‘win.’ That’s because the gold price is influenced by many unpredictable factors, such as the crude oil price, the currency exchange rate and international politics.

According to Tri, a person with ten dong to invest should allocate two to gold. They should sell gold right away when they can make a profit instead of greedily waiting for a bigger profit.

The Deputy General Director of Asia Commercial Bank, Do Minh Toan, disagrees. Though it’s a high risk form of investment, he said, gold investors still have a lot of opportunities to earn fat profits.

Two experts consulted on stocks, Huynh Minh of Ban Viet Securities and Nguyen Ngoc Truong Chinh of Sen Vang Securities, said that if investors follow a long term investment plan instead of ‘surfing’ in and out of the market, they will always have opportunities.

We Vietnamese have always felt that tangible things like gold or real estate are ‘safer,’ Chinh noted. We think that we will still have ‘assets’ even when real estate or gold prices decrease, whereas we will lose everything if we invest in stocks and the companies go bankrupt.

Real estate market judged the least bad choice at present

Some speakers pointed out that investment preferences in Vietnam have been greatly influenced by changing Government policies, a sign of the market’s immaturity. Most investors just follow the crowd.

In 2006-2007, investors poured money into stocks. When the stock market cooled off, they rushed to ‘throw’ money into the real estate market. Then when there was a chill in real estate, many shifted to make speculative investments in gold. Such inconsistency rarely pays off.


Participants from the real estate sector called it the safest investment channel for investors who can’t afford to lose their money.

Thu Duc Housing Development Co. Chairman Le Chi Hieu declared “tourism real estate” the wave of the future. A top executive of Nova Real Estate Co. pointed out that in real estate, investors always have two options – they can either invest directly or through financial intermediaries.

Dr. Do Thi Loan, Secretary General of the HCM City Real Estate Association, advises people to choose real estate because of its reasonable profit and high safety.

However, Luong Tri Thin, Chairman of Dat Xanh, a construction and real estate company, pointed out that real estate investors remain vulnerable to legal uncertainties, “because the Government changes policies regularly.” Further, Thin argued, there’s a financial mismatch — real estate developers gnerally need to finance projects on a twenty to thirty year horizon but can only borrow money for a maximum term of 15 years.

VietNamNet/LD