Gold prices in Da Nang have surpassed VND 70 million per tael, and the surge in prices will be unpredictable. 2022 will be more risky, making profitable investments harder than in 2021. Individual investors are advised to carefully consider choosing gold or any other financial channels to invest in order to minimize risk.

Financial experts recommend that individual investors should choose the right financial investment channels to reduce their risk in an increasingly unpredictable market. In the photo: Local people are looking for jewelry at a jewelry store located in Da Nang’s Hai Chau District under the Phu Nhuan Jewelry Joint Stock Company (PNJ). Photo: M.QUE

It has been less than a month since the God of Wealth Day (the 10^th day of the Lunar New Year), State-owned Saigon Jewelry Company (SJC) sold its gold at VND 73.5 million per tael on March 10. Over the past 24 days, both buying and selling prices for gold have climbed by more than VND 10 million per tael, and gap between buying and selling prices has risen from VND 1 million per tael to approximately VND 1.8 – VND 2 million per tael.

In the morning of March 10, gold prices in Da Nang softened to VND 70 million per tael. Thus, if investors invest in gold since early 2022, they will earn 13.8% to 19.5% returns depending on the time of selling while gold prices surged only 9.8% in the whole year of 2021.

Many economic experts warns that 2022 will be a more challenging year for people who want to invest in gold as its prices move up and down depending on the state of the global economy. Besides, the gap between domestic and world gold prices is VND 15 million per tael while that between buying and selling prices is up to VND 2 million per tael.

Currently, DOJI Smart Da Nang witnesses a few buyers while the majority of visitors to this store are sellers. In a similar move, there has been a small number of buyers in jewelry stores across Da Nang in recent days while most people have visited these stores to sell gold to take profits.

Amidst unpredictable changes in gold prices, investing in foreign currency is a better option for individual investors as currencies look much better positioned than others for 2022 due to the exchange rate management and stabilization policy issued by the State Bank of Vietnam along with abundant supply of foreign currencies in the Vietnamese market from remittances.

Major Vietnamese commercial banks listed the buying rate at 23,035 VND/USD and the selling rate at 23,215 VND/USD at the beginning of 2021 while the VND/USD buying and selling rates were 22,640 and 22,920 respectively in late 2021, a decrease of 1.3% compared to early 2021.

As for other investment channels, Mr. Tran Van Binh, the Vice Chairman of The Vietnam Association of Real Estate Brokers, said that the price of each land plot in Da Nang currently hovers between VND 2 billion and VND 3 billion that is attractive to many investors.

Mr Binh remarked that real estate prices in Da Nang, and Central Viet Nam as a whole, are forecast to increase slightly in the coming time, and real estate is a promising investment in 2022.

According to Mr. Tran Hoai Nam, the CEO of the Smart City One Member Limited Liability Company (a member of Dat Xanh Mien Trung Joint Stock Company), medium- and long-term investments are recommended for real estate investors to increase their profit margins. "Real estate cycle in recent years has been characterized by about 2 -3 years of increase followed by 1- 2 years of decrease in its prices, but investors can mitigate this risk by buying properties in good areas with good infrastructure and carefully checking the legal status of the property", Mr Nam advised.

In addition to the above- mentioned traditional investment channels, in recent years, we have seen an emerging trend of investing in securities.

Mr Nguyen Trung Kien, the Director of Agribank Securities Corporation (Agriseco) - Central Region Branch, said that the number of newly registered securities accounts in Agriseco in 2021 increased by one and a half times compared to the 2017-2020 period while return on security investment in 2021 was nearly 36%. This proves that investors have become increasingly interested in securities due to the effectiveness of this investment channel.

There is no formula and common method to determine which channel is the best investment. When investing in what channels, it is necessary to understand the legitimacy and its value. The higher a price is, the greater the stake, and the greater the risk is. Therefore, in terms of safety and profitability, bank deposits are the safest investments available to Da Nang people and they are relatively safe places to park our money and earn interest, and they are easy to manage and access.

Commercial banks in Da Nang currently offer savings account customers an annual interest rate of 6% to 7%. Accordingly, returns on bank deposits are expected to be 3% per year after subtracting the potential inflation rate of 3% to 4% from the nominal interest rate which is forecast for 2022.

Reporting by MAI QUE – translating by H.L