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Wednesday, June 26, 2024

True investors or not?

By Dr. Vo Dinh Tri

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In September 2023, there were 172,605 newly opened individual securities trading accounts, according to data from the Vietnam Securities Depository (VSD), bringing the total number to nearly eight million. However, how many of them were actually active was unknown. Investors and speculators Individuals participating in the stock market can be categorized into two main groups: investors and speculators. Interestingly, those who openly identify as speculators are seldom investors, while those who claim to be investors are often engaging in speculation. Differentiating between the two can be based on several criteria, including time frame, analysis method, risk level, and implementation approach. Investment typically involves a long-term perspective, often spanning years or even decades. This extended horizon allows for the power of compound interest in finance to work its magic. Therefore, individuals who buy and sell stocks over shorter periods, such as days, weeks, or months, are generally considered speculators. Speculators tend to rely more on technical analysis than fundamental analysis. They closely track price movements and trading volumes, seeking patterns and signals to make their moves. In contrast, investors focus on understanding a business’s background, its profitability, and its future growth potential. When it comes to risk, speculation carries a higher […]
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