Stock investors should avoid 8 mistakes in 2025

By the close of January 13, the VN-Index rose 5.17 points (equivalent to 0.42%) to 1,235.65 points. Market liquidity remained low, with total trading value reaching nearly VND 13.7 trillion, of which HoSE accounted for VND 12.12 trillion.

Discussing the cyclical nature of liquidity, Mr. Nguyễn Việt Đức, Digital Sales Director at VPBank Securities (VPBankS), noted that January is a critical period. Historically, a positive January often leads to a favorable year. This year, January has been less favorable, with a year-to-date decline of approximately 4%, he said.

"Based on my analysis, in the 26-year history of Vietnam's stock market, when January sees a decline, the market often faces a challenging year. Although reports may appear optimistic, it’s important to acknowledge January's significant predictive power.

Another important indicator is February. If both January and February perform poorly, the market outlook becomes highly negative. However, if January is weak but February shows improvement, there is room for optimism. Additionally, in Vietnam, the Tet holiday effect often leads to very low liquidity before the holiday, making the market makers' intentions more evident," Mr. Đức added.

The VPBankS analyst also noted that, shortly before the Tet festival, the inauguration of U.S. President-elect Donald Trump on January 20 falls inside Vietnam's Tet cycle. "I am hopeful that the market will bottom out around this time."

In reference to the January indicator, analysts at Agriseco Securities noted that, with a likelihood of 58.3%, January has recorded advances in 14 of the last 24 years since the founding of the Vietnamese stock market. January has had the highest average performance of any month, increasing by 4.9%. Gains in January have exceeded 10% eight times, which is the most amount for any month of the year. The yearly financial statement release of businesses is one factor contributing to January's strength.

However, recent data suggests that the market has shown muted reactions to financial results, as much of the information is often priced in during short-term rallies before official disclosures. Consequently, by the time official figures are announced, the market may have entered a consolidation phase.

Furthermore, positive catalysts for stock prices, such as credit room increases for mandated transferred banks, have yet to generate strong investor responses.

One expert noted that in the context of this year's January, several factors suggest that investors may still anticipate further short-term corrections.

"Stocks that tend to rise in the first month often perform well in the first quarter. Those that excel in the first quarter are more likely to become winning stocks for the year. Therefore, if you identify strong stocks early in the year, hold onto them. If you sell them, be sure to monitor them for potential re-entry opportunities," emphasized the expert.

Looking beyond January, Mr. Nguyễn Việt Đức forecast that, based on previous data, the market may find it difficult to achieve an 8.49% gain for Q1. "January is usually the best month, with increases of up to 5% on average. But we've already witnessed a 4% drop this January, so we're far from where we started. Therefore, we ought to have reasonable hopes for an 8–10% recovery from the bottom.

Statistics show that the two weeks before Tet are crucial. If the current downtrend stabilizes this week and recovers next week, investors may consider buying again. By then, the worst-case scenarios will likely have been priced into the market, Mr. Đức emphasized.

Regarding President-elect Donald Trump and trade policies, insights from Goldman Sachs and Bank of America suggest the Federal Reserve is unlikely to lower interest rates this year, with inflation concerns outweighing trade issues. However, if tariff policies turn out to be less stringent than previously stated, this could have a highly positive effect.

"This is why I’m waiting until the days just before Tet. When everyone feels disheartened and focuses on Tet preparations, like buying bánh chưng and peach blossoms, we stay in the market and buy stocks. This could lead to significant profits or a 'lucky red envelope' for the new year," Mr. Đức said optimistically.

The expert also highlighted eight mistakes investors should avoid in 2025, based on SEPA (Specific Entry Point Analysis) strategies from Wall Street legend Mark Minervini:

First, failing to lock in substantial gains, only to lose most of them later.

A lot of investors suffer with this mistake. Only a handful of "super stocks" exist annually, making it difficult to find them, Minervini said. If you missed FPT, VGI, or CTR last year, you probably lost out on these infrequent chances. Despite making up only 3–4% of the market, super stocks can nonetheless drop 20–30% in a single year. Why not lock in 10% gains ten times through super stocks instead of aiming for 100% gains? Profiting at resistance levels requires discipline, particularly in a sideways market.

"When a stock hits the Bollinger Band's upper range (80–100), it often declines. Last year, I adjusted my strategy to buy near the mid-band (MA 50–MA 100) and sell at the upper band, locking in around 10% profits," Mr. Đức revealed.

Second, not decisively cutting losses when they remain small (below 8%). Never let small losses turn into large ones. If you can’t sell your entire portfolio at an 8% loss, at least reduce your holdings by 50%.

Third, buying stocks after they’ve moved far beyond optimal entry points.

Fourth, failing to protect breakeven points after making a profit.

Fifth, holding on to stocks after significant declines.

Sixth, not having the courage to hold during hot market rallies.

Seventh, becoming emotionally attached to stocks, even when their prices fall.

8. Averaging down when stock prices drop.