The Allure of Stocks and Real Estate
Mr. Ngo Thanh Huan, Director of Personal Finance at FIDT Joint Stock Company, believes that stocks are the most promising investment opportunity in the second half of 2024. Stocks are a forward-looking investment vehicle that moves ahead of economic trends and is often referred to as a market of expectations.
“Since around October 2022, the stock market has hit its bottom, and the economy followed suit in mid-2023. It’s evident that the stock market will rise before the economy does, and vice versa. As the economy is currently in a recovery trend, it will fuel economic growth,” Mr. Huan shared his perspective.
When asked about specific stock sectors to invest in during this period, Mr. Huan suggested that investors should prioritize financial and banking stocks. He explained that the recovery of the economy and the upward trajectory of the market are closely tied to the rebound of the banking and stock sectors.
Following that, he recommended investing in real estate and industrial zones. From a long-term perspective, this sector is quite appealing due to its current affordable peak prices. However, the challenge with this sector is that it demands a truly long-term investment horizon. “Investing in stocks in the second half of 2024 is not a short-term play; it requires a minimum investment horizon of 1.5 years. Those looking to invest for only six months are taking on considerable risk,” he warned.
Stocks and real estate are the two most attractive investment avenues for the second half of 2024. (Illustrative image: CafeLand)
Regarding the real estate investment avenue, Mr. Huan predicted that this sector would recover in tandem with the economy. He added that some speculative segments, such as long-term agricultural land or peripheral projects, would be the last to recover. “The recovery trend will move from the center to the outskirts, from real demand to investment demand, and finally to speculative demand. This means that apartments will recover first, followed by small-value real estate, and then houses in the central districts of Ho Chi Minh City and Hanoi,” he elaborated.
Mr. Huan also mentioned that the market for townhouses (approximately VND 5 billion) is currently very vibrant. The latter half of 2024 presents the last opportunity for those with genuine housing needs or those seeking safe investment options to enter the townhouse segment or the land segment in central areas, especially in the districts of Ho Chi Minh City and Hanoi, or in the heart of Nha Trang and Da Nang.
Furthermore, the current low-interest rates for real estate purchases make it an opportune time to leverage financial instruments.
“In the first half of 2025, investors can expand their horizons and focus on more speculative segments, such as land in peripheral areas or provinces. They can explore segments with a mix of residential and agricultural land. Towards the end of 2025, they can venture into the most speculative segment in the market, which is agricultural land that has not yet been converted to residential,” Mr. Huan advised for those looking to invest in the real estate market in the upcoming period.
Bank Deposits and Gold Lose Their Luster
Concerning bank deposits, Mr. Huan opined that this option is not particularly enticing at the moment. Despite recent increases, deposit interest rates remain low, and growth is within the valuation range.
As for the gold market, there is no longer a significant advantage to be gained from selling gold bars to buy gold rings, as there was in the previous phase, since the prices of the two types of gold are now equivalent. With the cooling down of gold prices, converting gold to cash is also less appealing.
Experts predict that gold has the potential for another 10% growth by mid-2025, as the Fed lowers interest rates and geopolitical tensions persist. Therefore, gold still has room for growth but also carries the inherent risk of a reversal.
Bank deposits and gold are less attractive investment options for the second half of 2024. (Illustrative image: Yuanta)
Mr. Nguyen An Huy, a personal financial planning expert from FIDT, analyzed that the price of plain gold rings has historically not shown significant differences and has always moved in tandem with the global market. The impressive rise in global gold prices (around 13%) since the beginning of the year has propelled the surge in domestic gold ring prices. In contrast, gold bars have underperformed, with an average return of over 4%. This figure lags behind the appreciation of the USD (over 4.3%).
Mr. Huy forecasted that the gap between SJC gold bars and plain gold rings would narrow to VND 1-3 million per tael in the upcoming period. He advised investors who still wish to invest in gold to focus on monitoring the gap between gold bars and plain gold rings rather than solely on gold price predictions.
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