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Protecting your securities account during the Corona epidemic

Thursday 06, 02 2020
And as the Corona epidemic is only temporary, the recent drop has brought many aviation stocks to their ideal low prices.
Protecting your securities account during the Corona epidemic

The financial market is always more sensitive to any event than the real impact of a pandemic on the world economy and thus, Vietnam's stock market capitalization has been overly evaporated. In this context, many investors have chosen their action plan - one for each person.

Since the beginning of the Lunar New Year, the Vietnamese stock market has "evaporated" over US $ 13 billion of market capitalization, equivalent to more than VND 300,000 billion. To explain it in a simpler phrase, Vietnamese investors have lost VND 300,000 billion in just one week of trading.

>> How is the Vietnam stock market after Lunar New Year?​

The source of the deep decline of the global stock market in general and the stock market, in particular, is because the Corona flu epidemic is affecting tens of thousands of people in China and by the morning of 5/2/2020 there had been 493 deaths. The financial market is always more sensitive to events than the real impact of a pandemic on the world economy. However, this is inevitable because everyone is afraid of misfortunate events and many people choose to sell off to protect their accounts from further declining risks. Selling off is never the best plan and the stock market always has sellers and buyers and for challenges, each person has different ways of thinking and behaving.

Protecting your securities account during the Corona epidemic

“I have started bottom fishing”

Talking with us, Mr. H. - an investor with more than 10 years of experience in the market - commented: Many investors have overreacted to the Corona incident. Statistics show that Vietnam's stock market has fallen even deeper than those of Hong Kong, Indonesia, Philippines, Thailand ... The decline of VnIndex is approximately equal to that of the Shanghai Index.

Mr. H. said that the decline was unreasonable, so he had used his accumulated money to buy shares. He chose the aviation stocks group to buy in with the belief that the aviation market of Vietnam has just entered a growth phase, and as the Corona epidemic is only temporary, the recent drop has brought many aviation stocks to their ideal low prices.

When asked about the rate of margin, Mr. H. said “This is not the time to use loans to buy shares because of high risks. I bought mine entirely with my own cash.”

“I like the volatility of the market and this period is the golden opportunity”

According to Ms. N.T, for the past 2 years, the stock market has been quite bland. The stock kept going sideways in a narrow range so she withdrew two-thirds of her account to deposit to her savings. The remaining one-third of her account has been used to trade "hot" stocks for a long time. Enjoying venture capital, Ms. N.T often chooses stocks with "game" and accepts high risks. "Because I love hot stocks, I often structure my assets at a safe level. If the general market does not have many great opportunities, I will save my money and if the market signals that there are many cheap assets, I will withdraw the savings to invest to make a profit".

Ms. N.T said, on the 7th day of the Lunar New Year, seeing that the stock market had dropped abnormally because of an event happening abroad, she withdrew her savings and deposited it into the stock to wait for opportunities. "I have been closely monitoring the situation of the flu and knowing that the disease will not end in the short future and its impacts on the economy and investors, etc. have not been fully anticipated yet, I am proceeding to buy my stocks gradually. I have bought a few of the available stocks and will depend on the market development to take action."

When asked about whether or not to take advantage of the large fluctuation range of stocks to make a profit during the day, Ms. NT did not answer but only advised investors that with the market changing very quickly, daily trading could make investors buy back at higher prices. The most important thing was to carefully manage the actions on time unless you want taxes and fees which are required to pay securities companies to erode your profits.

“I have turned myself into long-term investor”

According to Mr. A’s opinions, he thought that in the middle of 2019 the stock market would bear more risks than opportunities as prices of many basic commodities increased. Given that the price increase impacts of some items such as electricity are negligible, Mr. A. said that although it had not reflected on the market yet, in the long term it would gradually eat into the business costs of the business, so he used to have plans to sell all of his shares at the beginning of the Lunar New Year.

"According to statistics, in the last 10 years, the stock tended to increase after Tet and I also want to have some fortune at the beginning of the year so I plan to have the first trading session after Tet. However, the corona virus appearing immediately after Tet caused the first session of the year to drop sharply. The same thing happened in the next session. My account has gone from owning heavy profit to suffering from heavy loss. Therefore, I have decided to "freeze" the account, turned off the price list and stopped thinking about it in the coming future".

When asked when he would resume his trading, Mr. A. said “ It is going to be quite a long time after this, and I will return to the stock market when the flu epidemic is over and the stock gets active again.

Not so lucky as Mr. A., Mr. N.S decided to sell his account and to get out of the game because most of his money invested in securities came from loans. His loss tolerance could not get higher and the cut loss was something he must do to keep himself from going crazy with the complicated fluctuations of the current stock market.

​>> SSI forecasts 9 industries negatively affected by the Corona epidemic

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