Investors have herd mentality

Vietnamese investors should define their own bottom of market indices when taking part in day-trading, said Singapore-based Kim Eng Securities’ analyst Ken Tai at a conference on Oct. 2.

He made the suggestion to Vietnamese investors at a conference on the risks and opportunities of day-trading or short-term investment, held by Kim Eng Viet Nam Securities.

According to Ken Tai, most Vietnamese investors were short-term, taking part in securities trading to make quick profits.

“Local traders tend to invest in a herd mentality, reflected by the harsh rises or falls of market indices,” said Kim Eng Viet Nam Securities’ director Le Minh Tam.

“This makes it necessary to introduce them to investment measures which are scientific and prosperous with the market’s common trends,” noted Tam. A bottom of market index is the point, defined by the investor, when they need to sell to make a profit.

Investors should be defining their own bottom of market indices, making sales at this point rather than following others. This would be more profitable for the investor than others that follow, Ken Tai said.

Ken Tai concluded that investors should act independently in their decisions after defining the right moment to make a sale.

During the conference, Ken Tai also confirmed that foreign investors, which were rumoured to be withdrawing, were continuing to pump money into the local stock exchange. However, their pipelined capital would be less than it was before, due to the bad situation of the global market.

Kim Eng Viet Nam Securities has recently opened a representative office in Hanoi , providing the same services as their HCM City headquarters. (VNA)