When asked about the best investment options to minimize risk while ensuring profits, finance expert Dr. Nguyen Tri Hieu shared that he makes investment decisions based on three criteria: safety, profitability, and liquidity. From now until the end of 2024, investing in stocks and specific areas of the real estate market are potential growth areas, in his opinion.
“If left unchecked, 2024 could be dubbed the year of gold. However, gold is currently undergoing adjustments. Exchange rates continue to rise, albeit not as steeply as earlier in the year, but it’s no longer an overly attractive investment option,” the expert opined.
Expressing his personal choice, Mr. Hieu said he would invest in an avenue that wouldn’t result in any loss and would offer immediate liquidity whenever needed. At present, he prioritizes safety and liquidity over other factors.
“Given these investment criteria, if I had 10 billion VND, I would put 5 billion into a bank savings account. As we approach the year-end, banks tend to offer higher interest rates. I’d opt for a short-term deposit so that upon maturity, I could reinvest and take advantage of potentially higher rates,” explained Mr. Hieu.
After allocating 50% of his investment funds to savings, he would invest 3 billion VND in real estate, a market that already offers promising segments and is expected to perform better in 2025 than in 2024. The remaining funds would be directed towards the stock market.
“The two investment avenues I’d steer clear of are gold and foreign currencies. Gold is undergoing a significant adjustment phase. I see no reason to venture into gold at this point and expose myself to substantial risks beyond my control,” shared Mr. Hieu.
Bank deposits remain the safest investment option. (Illustrative image).
Similarly, Dr. Le Duy Binh, Director of Economica Vietnam, believes that each investment channel has its own characteristics, advantages, and limitations. Therefore, the choice of investment depends on an individual’s financial capacity and risk appetite. Some avenues, like real estate, require substantial capital and a higher tolerance for risk due to price fluctuations.
On the other hand, investing in gold doesn’t necessitate a large amount of capital. However, the volatile gold prices witnessed recently indicate that it’s not an ideal investment channel. Instead, gold is better suited as an asset reserve rather than an investment vehicle. The rapid and substantial changes in gold prices could lead to substantial gains or losses for investors within a short period.
Regarding the stock market, Mr. Binh is optimistic, citing the positive correlation with the domestic and global economic recovery. Vietnam’s economy grew by over 5% in the first quarter, with inflation kept under control at around 4%, and trade showing an upward trend compared to the same period last year.
“However, investing in the stock market requires professional expertise, substantial capital, and a long-term vision. It’s not suitable for short-term investments,” emphasized Dr. Binh.
Hence, Dr. Binh suggested that bank deposits are a suitable option for everyone, especially with interest rates on the rise again, catering to those with a low-risk appetite seeking stability.
“Nevertheless, investors should not put all their eggs in one basket. Diversification is key to ensuring safety. If I had the funds, I’d allocate 50-60% to bank deposits and the remaining to other investment channels like stocks and real estate,” he said.
Echoing this view, Mr. Dang Tran Phuc, Chairman of AzFin Vietnam, asserted the importance of portfolio diversification for investors. Among the investment avenues, bank deposits retain their allure with 12-month fixed deposit rates currently ranging from 5-6% annually, providing investors with reasonable returns, high liquidity, and safety. In reality, personal deposits continue to flow into the banking system.
Mr. Phuc noted that after a surge in deposit rates in late 2022, there was a continuous downward adjustment in rates from mid-2023 onwards. However, since April this year, some banks have started increasing their savings rates. This upward trend is expected to continue until the year-end as banks compete for capital to support businesses’ production and trading activities during the peak season.
“Hence, at this point, depositing money in banks is the safest and most effective option. If I had the funds, I’d also allocate 50-60% to bank deposits, as the rates are quite stable and there are indications of further increases in the remaining months of 2024,” concluded Mr. Phuc.
