Where to invest amid high inflation?

Deposits in the banking sector of Vietnam have significantly increased after several months of contraction. Photo: Quoc Tuan

In Vietnam, the actual inflation rate is not very high. According to the General Statistics Office, Vietnam's consumer price index (CPI) increased 2.44 percent on average over the same period last year in the first half of 2022. (GSO).

Ms. Nguyen Thu Oanh, Director of the Price Statistics Department of the GSO, said the CPI is still under control in the first half of 2022, but there is significant inflation pressure in the third and fourth quarters of 2022. The high global prices of raw materials and materials, as well as Vietnam's economy's high degree of openness, are specifically variables affecting CPI in the final months of this year. This will have an impact on Vietnam's input goods. As a result, maintaining the desired inflation rate of 4% in 2022 will be extremely difficult.

The US CPI reached a 40-year high of 8.6% in May despite the FED's efforts to tighten monetary policy. The White House expects US inflationary pressure to continue. Furthermore, UK inflation has risen above 9%. Vietnam's inflation rate would be under increased pressure as a result of the supply chain interruption, Russia- Ukraine conflict, and China's zero-Covid strategy.

Deposits in the banking sector of Vietnam have significantly increased after several months of contraction. The population's deposits were close to VND 5.5 million billion at the end of March 2022, an increase of 4% from the previous year; economic organizations' deposits were close to VND 5.9 million billion, an increase of almost 19%. An interesting fact is that the population’s deposits in the first quarter of this year are higher than they are for the full year of 2021.

Vietnam’s stock market has achieved a price that cannot be lower

The aforementioned fact is thought to be the outcome of cash flow migrating away from investment channels at a time when the stock market is declining, the corporate bond market is fluctuating negatively, the real estate market is high risk, and the crypto currency market is in downtrend. Additionally, deposit rates have gone up.

Vietnam’s stock market has achieved a price that cannot be lower, but many investors are still wary of this channel, according to Dr. Le Anh Tuan, Director of Investment Strategy Planning at Dragon Capital.

Dr. Dinh The Hien, an economist, said Vietnam’s stock market may be on a recovery trend, but this is not certain. Investors who are unwilling to take on the danger of surfing will find this market to be risky. Investors may decide to hold off until the stock market will see a clear trend.

Dr. Dinh The Hien thinks that investors should keep an eye on the real estate market at this time because the price decline in the housing market could extend through the entire year 2022. Investors are generally advised against purchasing real estate on advice.

The short-term sideways movement of the gold market makes it unappreciated as a source of investing chances. For long-term investments, however, investors can purchase gold for about $1,700 per ounce in the international gold market, or 55- 60 million VND per teel for SJC gold prices.

Even though the cryptocurrency is still regarded as a global trend, the hot case of LUNA has been and continues to be a lesson for investors about significant hazards. As a result, it is advised that investors exercise caution when investing in the cryptocurrency market.