Have 500 million VND, should I save or buy stocks?

In just 3 months, the State Bank has reduced the operating interest rate 4 times, causing the deposit and lending interest rates to drop. In this context, many people wonder whether if they have 500 million VND, they should save for a term of 6 months to 1 year or invest in stocks because recently, the rate of return on this investment channel has been quite high, and the market is much more vibrant than before.

Mr. Nguyen Nhat Khanh, Head of Investment Consulting Department, Head Office Branch - Mirae Asset Securities Company, replied: Regarding the savings channel, the mobilization interest rate at commercial banks is currently decreasing quite rapidly, as of June 19, there have been 4 reductions in operating interest rates. For a 6-month term, the maximum interest rate that depositors receive is 5%/year, quite low compared to other channels.

For a 1-year term, the maximum interest rate that savers receive is only over 7% with most banks, because a few small banks with low competitiveness and brand can mobilize at 8%.

Có 500 triệu đồng, nên gửi tiết kiệm hay mua cổ phiếu? - Ảnh 1.

Investing in stocks is a long journey, investors need to equip themselves with basic knowledge...

Regarding the stock channel, this is a type of investment that is quite different from the other channels, so it is quite awkward to compare it with savings.

Firstly, this is a high-risk investment type with a high possibility of capital loss during periods of strong market fluctuations, such as the second half of 2022, so it will not be suitable for the majority of people, especially those of advanced age, near retirement or retired, who need a stable cash flow with low risk tolerance.

Second, this is a channel that generates very low and irregular cash flow (from dividends). Investing in this channel in Vietnam is mainly for the purpose of making profit from price differences, it can be said that many people participate because they want to get rich quickly.

With the problem posed, if you have never participated in the market but want to invest the entire amount of 500 million VND from the maturity of your savings book to the stock channel, you must consider carefully. Investing in stocks must be a long journey, learning and approaching the impact of the macro economy , understanding the industry, choosing businesses, from there finding good stocks, these steps are not simple at all.

Regardless of the investment school, it is necessary to equip yourself with knowledge and skills, and cannot simply "buy and sell" based on the chart and the beliefs of the majority. When the market fluctuates strongly, the group of small investors lacking knowledge will be the group that suffers the most.

In the second half of 2023, cash flow from low-interest channels, both mobilization and lending, may flow into securities, which will help the market become more vibrant and have better liquidity, thereby helping stocks have more momentum to increase in price, creating more opportunities for better profits. However, that is only what can be seen at first. People with idle money who are really interested in this channel should only allocate a small portion to start, and when they are really comfortable, increase the proportion. Remember, never increase the proportion of assets for this channel quickly because of short-term profits, it is very easy to fall into a "trap" - that is, get bogged down in losses after sharp declines in the market, then have an unfavorable view of this investment channel.

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