A shift in strategy from speculative trading to stock investing

Opportunities to choose fundamental stocks at appealing prices will arise as a result of the Vietnamese stock market corrections.

Stocks with genuine operational cash flow, values below the three-year average, and potential for steady profit growth through 2026 should be the focus of investors.

The market outlook after speculation

On November 10, 2025, with a noticeable drop in liquidity, the VN-Index formally started this year's significant correction phase (down more than 10% from the top). However, investors should view this as an unavoidable transition between the speculative phase and the return to the fundamental-based investing phase rather than a warning sign.

The loan-to-deposit ratio (LDR) of many commercial banks has increased to a high level following a robust cycle of credit and money supply easing. The fact that banks are becoming more and more reliant on the interbank market indicates that bank system liquidity is no longer as plentiful as it once was. Overnight interest rates frequently resemble the interest rate on a 12-month term deposit and stay in the high range of around 6% annually. This demonstrates the scarcity of short-term financial flows.

Similar circumstances frequently increased the stock market's sensitivity to liquidity problems in earlier cycles. The State Bank of Vietnam found it challenging to inject liquidity into the banking sector as exchange rate fluctuations remained "tight," suggesting that deposit interest rates may rise somewhat in the near future.

According to financial analyst Huynh Hoang Phuong, this might mark the end of the "age of cheap money," which was the primary cause of the last surge of speculation.

Common mistakes

Many speculative stocks gain on short-term cash flows and anticipation of tales that are hard to explain by future profits growth during times of heavy speculation. Investors frequently erroneously assume that this trend will last forever due to the habit of trading based on electronic boards and market enthusiasm.

"Trading according to old patterns, concentrating on stocks that earlier produced short-term returns while disregarding the underlying shift in liquidity, is a typical error nowadays. These equities frequently plummet dramatically when speculative capital flows decline, which results in investors losing money and experiencing psychological harm. As a result, they are no longer prepared for fresh possibilities when the market generates more appealing pricing”, said Huynh Hoang Phuong.

Experience from many cycles shows that those who maintain portfolio discipline and calmly restructure during speculative downturns will be the ones best positioned when the market truly recovers.

Differentiation and the pricing story

Although the market valuation has considerably decreased due to the recent severe correction of the Vietnam stock market, it is still not particularly inexpensive when considering the entire stock market.

Nonetheless, market sectors and equities are becoming increasingly distinct in terms of value. In comparison to the history from 2015 to the present, FiinGroup's estimates show that as of November 7, the P/E valuation of non-financial equities, excluding Vingroup and Gelex, was only 14.2 times in the cheap valuation area.

Many equities with strong fundamentals, in Huynh Hoang Phuong's opinion, are still in low price ranges or have just marginally gained since the start of the year. This is the possibility of medium- and long-term cash flow returning, particularly when investors begin to focus more on profit growth in 2026 rather than short-term "waves."

The upcoming declines may present opportunities to buy fundamental companies with appealing prices, particularly in market sectors with steady growth prospects like retail-consumer, infrastructure, building materials, energy, etc., if market risks do not rise significantly.

Portfolio restructuring

Investors should often reevaluate their portfolio structure and risk tolerance at this time. According to Huynh Hoang Phuong, there should be two primary axes for portfolio restructuring:

First, keeping an adequate stock ratio is essential for preparing for future possibilities that gradually emerge as well as for protecting against significant short-term changes.

Second, although potentially lowering the percentage of speculative or overheated firms, investors should concentrate on stocks with genuine cash flow, prices below the three-year average, and potential for sustained profit growth in 2026.

"Now is an excellent moment for fund investors to reassess their current fund portfolio. Many quality stock funds that have not increased in price during the speculative period are likely to regain outstanding performance as the stock market returns to the fundamental analysis", stated Phuong.

The pre-speculative stage is over. Value and genuine profits are returning to the core of the Vietnamese stock market as it enters a new era. This is not a frightening stage for investors who have adequate patience; rather, it marks the start of a new, braver, and more durable investing cycle.