Experts advise investors not to try to predict the market bottom. They should have their own strategy depending on their position and the quality of their current stock portfolio.
Do not try to predict the bottom
In a discussion, an expert noted that the market’s downward pressure on June 8 came from two main reasons.
First, the unexpected escalation of US-Iran tensions increased global risk aversion. Last weekend, the Nasdaq dropped over 4%, while gold, Bitcoin, and many other investment assets also plunged simultaneously. According to the expert, oil prices returning to the $100 per barrel range raised concerns about a resurgence of inflation.
The new Chairman of the US Federal Reserve is expected to act more decisively, with plans for one to two rate hikes over the next one to two years. This creates pressure on cash flow and a net selling sentiment in the global market, negatively impacting Vietnam.
Second, the valuation of many technology and AI stocks worldwide has reached very high levels. With a price-to-book ratio exceeding 10 times for some leading companies, this group has become sensitive to adverse news. In Vietnam, the VN-Index continues to be heavily affected as the Vingroup stock group adjusts.
Regarding trading strategy, the expert believes investors should not try to predict the market bottom. For investors using margin, the top priority is portfolio management to avoid forced liquidation if the market continues to decline.
For investors not using margin, the expert recommends reviewing the fundamental foundation of the stocks in their portfolio. Stocks with a strong foundation typically recover faster when the market stabilizes. Conversely, stocks lacking fundamental factors may be left behind even when the market rebounds.
For those with a high cash ratio, periods of pessimistic market sentiment often present many opportunities. However, instead of trying to catch the bottom, investors should invest steadily to gradually accumulate fundamentally sound companies at attractive valuations.
Waiting for support signals around 1,750 points
One securities firm noted that the VN-Index has fallen below the SMA50 moving average. In the coming sessions, investors should trade cautiously, waiting for the market’s fluctuation range to narrow and stabilize.
Another securities firm observed that the June 8 session showed the decline was mainly due to caution and a wait-and-see attitude from cash flow, rather than a sudden surge in selling pressure. In the short term, the index may continue to face downward pressure as it seeks a new equilibrium zone. The 1,800 point area is likely to act as a nearby resistance level after being breached.
The VN-Index is currently approaching a key support level for the medium-to-long-term trend around 1,745 points. Buying demand is expected to return at this level, supporting the process of stabilization and balance in the coming sessions.
Investors are advised to prioritize risk management and maintain a reasonable stock allocation, avoiding chasing prices while the short-term trend remains weak.
Another firm stated that investor sentiment is currently pessimistic, leading to short-term selling pressure. Liquidity only increases when prices drop sharply. However, after the market recovers, liquidity decreases again.
It believes the market’s reasonable capitalization zone is around 75% of 2025 GDP, corresponding to the VN-Index in the 1,700-1,750 point range. Investors should limit panic selling if the market continues to adjust and indices enter a short-term oversold state.
