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Seeking places where money can generate money
Of six investment channels, four channels have brought losses to investors, while only two have brought profit.
In the last three months, the VN Index decreased by 32.1%, the real estate price decreased by 5%, gold price 2.78%, while consumer product prices by 1.66%. Only investments in dollars and bank deposits could bring profit as the dollar value increased by 2.05% and the savings interest rate by 2.5% on average.
The most important thing investors need to keep in mind when considering investment decisions is the price fluctuations of commodities.
Commodity and service prices are likely to increase in January and February thanks to New Year 2009 and Tet. However, experts believe that the price increases will be low, and even lower than the increases of the same period in 2001 (0.3% in January, 0.4% in February). Meanwhile, the demand will be even lower from March, and exports will face a lot of difficulties due to global economic recessions. All that spells that commodity prices will increase slowly or even decrease.
Investments in gold will depend on two factors, the world’s gold price and the VND/US$ exchange rate. The world’s gold price, set in US dollars, may increase if the greenback loses its value against other hard currencies. However, since the UK, EU and Japanese economies have also fallen into recession and the interest rates in the countries have also seen sharp decreases (2-2.5% in EU, UK, and 0.1% in Japan), the gold price will be difficult to forecast, and still heavily depend on the purchases and sales of investors and speculators in the world’s market.
Meanwhile, investment in the greenback will depend on the US$ price performance in the world’s market and the forex policy to be followed by the State Bank of Vietnam.
With the FED’s interest rate down to nearly zero, in theory, the inflation rate will increase in the US, while the greenback will devaluate. However, in fact, countries have been rushing to purchase US treasury bills, leading to the US dollar increasing in value, while the US ‘exports’ inflation to other countries.
However, in general, as a result of the US economy’s recession, the dollar value will probably continue to decrease.
In Vietnam, in order to stimulate exports and curb the trade deficit, as the foreign currency supply will not increase rapidly or even decrease, the exchange rate is expected to stay firm if the US dollar value decreases in the world’s market, or increases slightly.
Regarding real estate investments, there are more investors who have been trying to escape from the market than jumping in. There are two reasons for this. First, the market has been cold for a long time and prices continue sliding. Second, speculators dare not make more investments in real estate, while they need to pay bank debts.
The VN Index, after falling continuously and breaking different bottom lines, has moved up slightly in the most recent trading sessions.
Making bank deposits proves to be the safest and most profitable channel at present. Though deposit interest rates have dropped to just half of the rates of one year ago, they are still higher than the price increases, and thus can bring real positive profit to depositors.
TBKTVN
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