"Catching the bottom" becomes "catching a falling knife"
Interest rates have continuously dropped and hit new lows, so savings deposits have gradually lost their appeal. Securities are considered one of the most attractive alternative investment channels. The stock market has witnessed a record number of new accounts opened. This is accompanied by extremely high liquidity.
Specifically, according to data from the Vietnam Securities Depository and Clearing Corporation (VSDC), the number of securities trading accounts of domestic and foreign investors as of August 31, 2023 was nearly 7.7 million accounts, an increase of 188,635 accounts compared to the beginning of the month.
The number of newly opened domestic personal accounts reached 188,165 accounts, accounting for 99.75% of the number of newly opened accounts in August, higher than the 150,000 newly opened accounts in the previous month and the highest level since the figure of nearly 200,000 accounts recorded in July 2022.
Participating in bottom fishing but accidentally "catching a falling knife", stock investors witnessed the entire market portfolio "evaporate" more than 275,076 billion VND. Illustrative photo
The new record number within 1 year shows that the stock market is an attractive investment channel at the present time.
Along with the sharp increase in the number of newly opened accounts, the market liquidity has also “heated up” significantly. In August, on the Ho Chi Minh Stock Exchange alone, the total trading volume reached nearly 23 billion shares, equivalent to VND507,443 billion, a sharp increase compared to 18.4 billion shares, equivalent to VND383,518 billion in July.
These data have created strong confidence among investors that the cash flow into stocks will help the VN-Index set new records. Therefore, when the VN-Index fell sharply in September, many investors joined in bottom fishing with the expectation of “hitting big”.
However, instead of catching the bottom, investors "caught a falling knife".
Investors lost 275,076 billion VND
Mr. Nguyen Dinh Trung, a stock investor with more than 10 years of experience, said that because he trusted too much in the cash flow, he fell into the situation of "catching a falling knife". He shared: "When interest rates continuously decreased, I believed that the cash flow would shift to the stock market, so the VN-Index would set new records. That's why I put all my money into stocks."
However, the market in September caused him heavy losses. After many ups and downs in trading sessions, VN-Index closed September at 1,154.15 points, down 69.9 points, equivalent to 5.7% compared to the last session of August. The market capitalization of the Hose floor "evaporated" 275,076 billion VND (about 11.2 billion USD).
Wanting to "buy at the bottom", Ms. Le Hoang Dung lost 33.81%. Photo: LHD
Along with the sharp decline in VN-Index, liquidity is also showing a strong downward trend. In the last session of September, only over VND13,000 billion was successfully traded.
In September, the Ho Chi Minh City Stock Exchange had 18.4 billion shares, equivalent to VND442,489 billion, successfully transferred, down 4.6 billion shares, equivalent to 20% in volume and down 64,954 billion VND, equivalent to 12.8% in transaction value compared to August.
The entire Ho Chi Minh City Stock Exchange fell 5.7% in September, but Mr. Trung's investment portfolio lost twice as much.
More miserable is Ms. Le Hoang Dung (Hai Ba Trung - Hanoi). Ms. Dung said she is an F0 (new stock player). She has been in the market for more than a year and mainly trades based on advice from "stock groups". Because she participated in "bottom fishing" in September and accidentally became "catching a falling knife", Ms. Dung lost 33.81% of her portfolio.
“Without knowledge or experience, I bought according to the advice of Zalo ‘experts’ and lost 33.81%. Luckily, the total amount of money I put into stocks was not too large so I still have a way to… learn from my experience,” Ms. Dung did not hide her “bloody” experience.
Dung is now mentally prepared to see losses grow as the stock market is not highly valued in October.
VCBS Securities Company said that from a technical perspective, selling pressure near the end of the last session of September caused the VN-Index to fail to maintain a good recovery session, reversing close to the reference level.
In a positive scenario, VN Index can still move up to the 1170 - 1175 area in the short term.
“We recommend that investors remain cautious and plan short-term trading to manage risks. Investors should only maintain a ratio of 10-30% of their stock accounts for short-term swing trading strategies,” VCBS advised investors.
Source
Comment (0)