The safe option
According to Mr. Phan Dung Khanh, Head of Investment Advisory at Maybank Kim Eng Securities Company, investment channels can be divided into two categories - safe investment, and venture capital investment. Safe investments include government bonds, insurance, and bank savings. While investment channels, such as real estate, stocks, and cryptocurrencies, have higher profitability but are riskier. High returns always go hand-in-hand with high risks, that is reality.
Dr. Dinh The Hien, an economist, also said that buying gold, depositing money in banks, and keeping US dollars are safe investment channels. Although the interest rate for savings in early 2021 tends to decline because banks have been reducing input costs to lower lending rates to support people and enterprises to overcome difficulties caused by the Covid-19 pandemic, many commercial banks still offer an interest rate of 6 percent per annum for 12-month term deposits. Even, some commercial banks are luring capital with interest rates of 6.8 percent-7.3 percent for terms of over 12 months.
“Bank savings still enjoy positive real interest rates in 2021 so at present, it remains the top choice for many people with idle money. It is considered an investment channel much more effective than the US dollar and gold,” Mr. Hien said. Many other people also said that in the context that the pandemic shows sign of control, and inflation rebounds as the consumer price index in February rose by 1.52 percent compared to the previous month - the highest increase in the last eight years - the deposit interest rates are likely to climb again.
However, Mr. Phan Dung Khanh said that depending on their own preference and forte, investors will make decisions. According to Mr. Khanh, investors, who are inclined to safe investment, can choose 70 percent-80 percent of the capital to invest in safe channels in their investment portfolios. Besides the savings channel, investors can choose to buy government bonds and insurance. While knowledgeable investors can choose a higher proportion of venture capital from 60 percent to 80 percent of the capital to invest in securities, real estate, and gold. Cryptocurrency is also a highly profitable channel. However, investors may face high risks because this is an investment channel without legal protection. Even, investors possibly face risks of being stolen money by hackers.
Expectations for the stock market
Securities was a profitable investment channel in 2020 when the VN-Index surpassed the 1,100-point mark, an increase of about 15 percent, the highest level in three years since 2018. The stock market in 2021 is still considered one of the brightest investment channels. In fact, even after the third wave of the Covid-19 pandemic, ending February, the benchmark continued to advance by nearly 65 points to 1,168.47 points, up nearly 6 percent compared to the end of last year.
Dr. Nguyen Tri Hieu, a finance and banking expert, said that investing in any channel should consider the following objectives: safety, profitability, and liquidity. For instance, as for real estate, despite its low liquidity, it is an investment channel with high profitability if investors can find products with good prices and good locations. However, capital safety is another story, because real estate enterprises can suffer losses, and it takes time to sell their products. Gold prices increased sharply in 2020 and switched to the downward trend in early 2021. Gold even fell to below US$1,700 an ounce, a loss of nearly 10 percent compared to the end of 2020. However, the domestic gold prices do not link with the global ones. Gold can be invested in the medium and long term because gold is always a safe-haven when stimulus packages are pumped to support the economy. Investors should not take risks, surfing with gold because the gap between buying and selling prices of domestic gold trading enterprises is always large.