Is Investing in Gold, Real Estate or Stocks the Most Profitable?

Stocks: A Potentially Lucrative Investment Avenue

In an interview with
Tiền Phong Journal

, Mr. Nguyễn Quang Huy, a finance expert from Nguyen Trai University, shared his insights on investment avenues in Vietnam. While real estate has been the predominant investment channel in the country for many years, Mr. Huy believes that the landscape is shifting.

He predicts that the high-end real estate segment may face challenges in 2024 and 2025 due to rising capital costs and decreasing purchasing power. Instead, affordable and mid-range properties will likely become the focal point for investors, driven by market demand.

Mr. Huy highlights the appeal of projects in satellite urban areas, those near major transportation routes, and those benefiting from public investment. With attractive loan packages and urbanization trends, these projects offer a balanced opportunity for investors and homebuyers alike. However, he cautions investors to prioritize projects with transparent legal frameworks and assured construction progress to mitigate risks.

Turning to the stock market, Mr. Huy believes it is entering a “golden phase.” With a low average P/E ratio compared to the region, the market presents a significant opportunity for long-term investors. The expected strong growth is attributed to foreign capital inflows.

The upgrade of Vietnam’s stock market from “frontier” to “emerging” status will not only boost liquidity but also attract substantial investment, particularly in sectors like banking, real estate, and manufacturing.

Mr. Huy advises investors to focus on stocks with strong fundamentals in sectors benefiting from economic development policies, such as renewable energy, exports, and consumer goods production. He also emphasizes the importance of closely monitoring market dynamics and monetary policies to make timely investment decisions.

Mr. Huy also suggests that corporate bonds are gaining traction as an investment channel, offering stable cash flow potential. However, he cautions that not all bonds are equally safe. Investors should prioritize reputable issuers with transparent financial disclosures and solid asset collateral. This option suits those seeking a balance between risk and profit. Diligent scrutiny of the issuer’s liquidity and business performance is essential to safeguard capital.

In a dynamic economic environment, savings accounts remain a safe haven for investors prioritizing capital preservation. With interest rates hovering around 6% per annum, savings accounts offer positive real interest rates and high liquidity. Nevertheless, this option may not provide high returns, so it should be considered as part of a diversified investment strategy.

“Investors need to thoroughly study the market, prepare strong financial backing, and have a clear business plan to seize opportunities arising from the wave of innovation,” advises Mr. Huy.

Tempered Expectations for Gold

Mr. Huỳnh Minh Tuấn, Chairman of the Board of Directors of FIDT Investment and Asset Management Consulting Company, notes that gold and USD have witnessed exceptional price increases this year, reaching historical peaks. There were moments when SJC gold bars approached 90 million VND per tael, while USD selling rates at banks surpassed 25,500 VND per USD.

Gold, a traditional investment avenue, holds a defensive appeal for East Asians, particularly in Vietnam. The buying spree by central banks, coupled with inflationary pressures and political instability, has supported the upward trajectory of gold prices this year.

However, Mr. Tuan argues that the strengthening USD after the US presidential election and easing inflationary pressures could dampen gold’s upward momentum next year. He does not anticipate gold delivering high returns in 2025.