With the VN-Index falling sharply, what should small investors do?

(NLĐO) – VN-Index has fallen for two consecutive sessions with strong selling pressure from foreign investors – often referred to as "smart money." Is this a good sign for investors?

After nearly four months of continuous price increases, and especially six weeks of soaring liquidity, the VN-Index unexpectedly reversed course and declined after approaching its historical peak of 1,550 points. At the close of the trading week from July 28th to August 1st, the main market index fell sharply to 1,495 points, a decrease of 2.35% compared to the end of the previous week.

With the VN-Index falling sharply, what should small investors do?

Selling pressure intensified during the last two trading sessions of the week, causing many stock groups to reverse course and fall sharply. Sectors such as retail, technology and telecommunications, seafood, agriculture , steel, and real estate were all affected by the correction.

Some sectors managed to hold their ground for most of the week, such as stocks and shipping.

However, by the final trading session of the week, selling pressure spread, causing many stocks to lose value. Market liquidity reached a record high last week, with an average daily trading value of nearly 49,000 billion VND. Meanwhile, foreign investors surprised everyone by net selling over 4,750 billion VND on the HoSE in just one week.

VN-Index fell sharply after a series of consecutive gains over the past several months.

After a series of strong net purchases in July, foreign investors unexpectedly reversed course in recent sessions. On July 29th, precisely when the VN-Index reached 1,550 points and the market was at its most active, foreign investors sold off shares with a net value of over 880 billion VND.

Mr. Tran Khanh, an investor in Ho Chi Minh City, shared: "I've noticed that the market has been rising sharply for the past few days, but foreign investors have continued to sell net. They sold over 4,000 billion VND in the last two trading sessions of the week. I wonder if this is a sign that the market is preparing for a more significant correction?"

Tracking the flow of smart money

However, experts recommend that investors need to view the actions of foreign investors more objectively. At a recent stock market talk show organized by the Nguoi Lao Dong newspaper , Mr. Le Huu Thoai, Director of the Online Client Department of Rong Viet Securities Company, emphasized that the actions of foreign investors should not be considered a guiding principle for personal investment strategies.

Foreign investors sold a net of over 4,700 billion VND last week on the stock market.

Mr. Thoai cited that in the first six months of the year, foreign investors had net sold up to 40,000 billion VND, but in early July they quickly net bought 11,000 billion VND. Although overall they were still net sellers, the VN-Index continued to reach new highs. This shows that the actions of foreign investors should only be considered as a reference, not a decisive factor.

However, calling foreign capital "smart money" is not without basis. According to analyses from several securities companies, when the VN-Index was still in the 1,280-1,300 point range, foreign investors began buying heavily. And just two weeks after the index surpassed 1,400 points, they continued to pour in an additional 11,000 billion VND – a net buying level that demonstrates decisiveness and keen awareness of market trends.

Mr. Vo Diep Thanh Thoai, Head of Senior Client Department at DNSE Securities Company, shared that there was a time when the market reached 1,400 points, which was likened to "buying at the peak" due to excessive net buying by foreign investors. However, in reality, the VN-Index continued to surpass 1,500 points afterward, reflecting that foreign capital remains very strategic in its approach to the market.

According to Mr. Thanh Thoai, investors should not focus too much on absolute benchmarks like 1,400 - 1,500, as this can easily create an unrealistic sense of "high" or "low." More importantly, they should monitor which sectors and stocks foreign capital is prioritizing, and then make decisions that align with the overall trend, rather than simply reacting to news or short-term fluctuations.

Source: https://nld.com.vn/vn-index-giam-sau-khoi-ngoai-xa-hang-nha-dau-tu-nho-nen-lam-gi-luc-nay-196250802085559433.htm