Experts advise that if there is enough reserve fund, periodic stock investment is a suitable strategy for young people now and in the next few years.
I am female, 26 years old, single, have been working for two years. In addition to the main job, the income is about 10 million VND per month, there is an additional income of 9 million VND. I live with my parents, so every month I only pay for my sister's school fees and my own expenses. Therefore, every month, I have more than 5 million dong left over.
Currently, I have saved an amount of money, in which: 100 million in savings, 18 million in investment in a stock with a slight interest. I consult experts about 3 projects as follows.
Firstly, in the near future, I can save about 30 million dong more, and I want to continue investing in long-term securities (only 1-3 stocks of which are owned) and long-term fund certificates.
Secondly, the balance of 5 million dong per month, I calculate to allocate to fund certificates of 1,5 million, invest in securities of one million, deposit 1,5 million in online savings, and make a provision of one million.
Third, the company usually pays salary every few months, so after each time I receive, I have an additional amount of 30-50 million. I don't know how to allocate that money to land, gold, securities or continue to save.
Nguyen Thi Cuc
Customers are trading securities at a headquarters on Pasteur Street, District 1, January 1. Image: Quynh Tran
Consultants:
First, based on the information you provided, I have some initial comments about your personal finances as follows. Your salary income is still long (since you have just graduated from school for two years, you will work for a long time in the labor market) and there is a lot of potential for income growth. As a result, you can allocate more to high-volatility but higher-yielding assets like stocks, or, in the case of larger capital, real estate.
You already have a steady source of residual income even though the company often pays unevenly. In the long term, you will have a surplus income of 5-10 million VND per month.
Besides, you also have a reserve fund, which is 100 million savings in the form of bank deposits. Normally, the reserve fund will be equivalent to 3-6 months of spending (about 15-25 million for current spending). This will depend on whether you have financial protection products. This fund needs to increase to more than 6 months of spending if in the next 2-3 years you are the main source of income for your family and your parents do not have a pension or insurance. If your parents are less dependent on you for at least the next 3-5 years and they also have a pension or insurance, I consider a savings of VND 100 million to be enough for a contingency.
With the above analysis, I recommend that you do not need to increase too much in provisions (deposits) unless you fall into the above cases or the periods of high savings deposit interest rates (may apply 8,8% or more with a term of 12 months, often also accompanied by a bad period of the market).
When human resources in the future are long and there is a steady surplus of low numbers, periodic stock investing is a strategy that works for you now and in the next few years.
With the first amount, 30 million dong coming soon (different from 5 million dong monthly), I recommend investing in the assets you currently have. Because I don't know the portfolio you are allocating, I give a general allocation method that is divided into three capital injections (each time 10 million) and each purchase is at least one month apart.
You should prioritize buying corrections or stocks you want to buy corrections. In addition, you can also prioritize the occasion to increase the balance of the portfolio. For example, in your portfolio, a certain code is relatively less than others in terms of value, so you should buy more when allocating this amount to help the portfolio more balanced.
About 5 million VND monthly, in my opinion, it should not be distributed too fragmented as you suggested. The online savings part is both profitable and considered a backup (because online savings can be withdrawn immediately, the liquidity is close to cash). Therefore, if you are not in a situation where there are dependents, the extra redundancy is not necessary.
Instead of splitting, you can completely allocate 5 million into an investment account (fund certificates and individual securities). Accordingly, you can pour money into a certain fund 2,5 million monthly and the remaining 2,5 million into individual stocks. This does not need to be too rigid and can be allocated this month to the fund, next month to shares because 2,5 million dong is difficult to buy a lot of 100 shares in the current market. Whether to allocate more to individual stocks or to funds, depends on how well you understand the market and how much you know the business is accumulating. If knowledge is limited, I would recommend a larger allocation to fund certificates.
Regarding the monthly salary of 30-50 million VND, similar to the 30 million you mentioned first, priority should be given to the stock market instead of other options. Real estate will be suitable at a later stage when you have accumulated enough and active income from work is higher and more stable to cover the interest and principal payments periodically when buying real estate.
Besides, the stock market is valuing relatively cheaply in history, quite suitable to accumulate assets in the current period. The VN-Index's P/B ratio chart below shows the periods when the white line (market valuation) is below the solid blue line (the moving average) when the market is cheap and suitable for long-term assets.
The VN-Index's P/B ratio is below its moving average, one of the signs that valuations are cheap. Source: FID
In addition, you can buy a little gold (but don't allocate too much) during each spike. This should be included in the savings you already have.
Huynh Hoang Phuong
Head of Investment Research and Analysis Division
at FIDT . Investment Consulting and Property Management Company
