With unpredictable economic fluctuations, where to invest effectively?

	New Year for Vietnam’s stock market
	Member of the Politburo, Deputy Prime Minister Vuong Dinh Hue: Vietnam's economy flourishes in a world of fluctuations
	Expectation of foreign capital is more positive in 2020

Concerns about the disease are causing gold prices to rise. Photo: H. Diu

Many positive factors

In 2019, the world economy witnessed many fluctuations, slowing down due to trade conflicts between the US and China, and geopolitical fluctuations of many countries. This has led to the "dance" of many investment channelsfrom the stock marketto the foreign exchange and precious metalsmarkets.However, Vietnam's economy maintained growth thanks to positive supporting factors from the stable macroeconomic environment.

In 2019, GDP established the second consecutive year of increasing over 7% since 2011, with an increase of 7.02%.Inflation was kept low, import-export turnover exceeded US$500 billion,newly established enterprises reached a record level.Therefore, if excluding the factors affecting the external economy, the domestic economy will create extremely attractive investment channels.

Specifically, 2020 is considered a significant milestone for the banking system when this group must finish the restructuring phase of handling bad debts and move up to international standards. Along with that, the monetary market is being run stably,the exchange rate and gold price have fluctuationsin the allowable amplitude.Therefore, experts believe thatthe investment and savings channelwill be the most attractive, because inflation is still low, so the real interest rate of banks(listed interest rate minus the rate inflation) is still higher than the volatility of foreign currencies and gold prices.

2020 is also an important year forthe stock market with the implementation of the project "Restructuring the stock market and the insurance market until 2020 and orientation to 2025" approved by the Prime Minister, which requests astock market sizeincrease in both quality and quantity to become an important medium and long-term capital channel for the economy.Meanwhile, Vietnam's real estate market is still one of the attractive markets for domestic and international investors, through a series of mergers and acquisitions.

The market is not for the "faint of heart"

Although many indicators have evaluated "optimism" for economic growth in Vietnam, but it is found that there are still many risks that can affect investor sentiment.Accordingly, Vietnam's strong growth trajectory remains and is supported byimprovement in manufacturing and service sectors.But with the stock market, the happenings did not coincide with the macro economy when the VN-Indexgainedslightly.According to the investment strategy report of VnDirect Securities Company,the two main pressures on Vietnam's stock market are the slow profit growth of listed companies and the tightening of credit for highrisk industries such as real estate and stock investment.These causes will continue in2020, making the stock index stable and only increase 20.7% to 1,160 points by the end of 2020.

Talking about the real estate market, Ms. Nguyen Huong, General Director of Dai Phuc Land Real Estate Joint Stock Company, said real estate was an area not for "the faint of heart" due to many risks.Because when the overall macro picture in 2019 was mostly bright, the real estate market was still gray due to inadequacies in supply and demand,resulting in poor liquidity. However,the economist Can VanLuc said thatthe real estate market was still in the process of basic section, not ata pessimistic level. One of the main reasons was that institutions and policies did not keepup with the development of real estate,such as the condotel issue. Moreover, in 2019, real estate enterprises on the stock market still grew well and the stock price increased on average by 13% compared to 2018.

With the gold investment channel, last year, the market showed great fluctuations. Especially, from the beginning of this year, developmentof acute respiratory infections caused by new strains of coronavirus have pushed up global and domestic gold prices. According to the General Statistics Office, in January, the average world gold price increased by 5.1% compared to December 2019. In Vietnam, the gold price index in January 2020 increased by 4.37% over the previous month and by 18.64% over the same period in 2019.

While the USD price index in January increased by only 0.02% compared toDecember 2019 and decreased0.35% over the same period in 2019.

But experts say that rising gold price does not mean that investment in gold will benefit but must have methods and strategies to prevent risks. The economist, Assoc.Prof.Dr. Ngo Tri Long saidthat the domestic gold price depended on the world gold price as well as the supply and demand relationship in the country,so the "change" of the gold price was very unpredictable,it could increase or decrease sharply anytime.Therefore, gold could be a safe asset"shelter", but investors must be careful and should not put all money ingold. Theyshould not buy, resell as "surfing" and must closely monitor the gold market and distribute cash flows harmoniously.This shows that the selection of attractive investment channels for 2020 still depends on the understanding and experience of the investors, even possibly based on the "luck - risk"factor.