Stock investment is one of the most popular and attractive forms of investment in today’s financial market. With its high profitability and flexibility, stocks provide numerous opportunities for investors. However, to succeed, investors must have a solid understanding of stocks and the stock market.
1. What is a Stock?
A stock, also known as “equity” in English, is an important type of security that represents ownership of a part of the issuing company. When you own a stock, you become a shareholder in that company, with the right to participate in important business decisions (such as voting for the Board of Directors) and receive dividends if the company is profitable.
Stocks are not only assets that certify ownership but can also be transferred from one person to another through methods such as inheritance, gifts, or collateral. However, the value of a stock is always influenced by two key factors: the overall market conditions and the financial performance of the issuing company.
In Vietnam, the stock market currently has nearly 2,000 companies listed on various exchanges. This number continues to grow, creating diversity but also making it difficult for new investors to decide which stocks or stock groups to track and invest in.
2. What is Stock investment?
Stock investment, also known as “stock trading,” is a popular investment method that many people are currently interested in. The goal of stock investment is to buy stocks at a low price and sell them when their value increases, thus earning a profit from the price difference.
To participate in this market, investors need to have a securities account and investment capital to carry out transactions on stock exchanges. However, effective investing requires not only capital but also a solid understanding of the stock market, as well as the financial factors that influence stock price changes. Knowledgeable investors can select potential stocks, avoid market traps, and optimize their profits.
3. Stock price
The stock price is the monetary value at which a stock can be traded at a specific point in time. However, stock prices are not fixed and continuously fluctuate, influenced by market factors and investor demand. As a result, stock prices can vary significantly from moment to moment, depending on supply and demand, as well as external factors such as the economic and political situation.
When participating in the stock market, investors primarily aim to profit from the difference between the buying and selling prices of stocks. Therefore, monitoring stock price movements is crucial for making accurate and timely investment decisions.
Stock prices can be assessed through various methods, including fundamental analysis, technical analysis, and complex financial valuation techniques. It is essential for investors to choose the most appropriate method to determine the true value of a stock, allowing them to develop optimal investment strategies.
4. Where to buy and sell Stocks
Buying and selling stocks, or stock trading, takes place on official stock exchanges. In Vietnam, there are three major stock exchanges where investors can trade: the HOSE (Ho Chi Minh Stock Exchange), the HNX (Hanoi Stock Exchange), and the Upcom (Hanoi Stock Exchange for unlisted companies).
To trade stocks on these exchanges, investors must open a securities account with a reputable securities company such as SSI, TCBS, VPS, etc. Opening an account is quick and convenient, requiring only a few simple procedures. Once the account is opened, investors can trade stocks online directly through the platform of the securities company, saving time and effort.
5. What are the Stock trading fees?
Trading fees are an important factor that investors need to consider when participating in stock transactions, especially for traders. Before trading, it is essential to research the fees and taxes of each securities company to choose the one that best suits your needs. The fees that investors should be aware of include:
- Capital Gains Tax: Investors are subject to a 0.1% tax on the sale value of stocks when transferring ownership, which is deducted by the securities company.
- Trading Fees: Each securities company charges different trading fees, but these fees should not exceed 5% of the transaction value.
6. Benefits of buying Stocks
Stocks are one of the most popular financial products on the stock market. Investing in stocks not only allows investors to participate in the growth of businesses but also provides several potential benefits, including:
6.1 High profitability in the short and long term
Stocks are tools that help companies raise capital from individual investors to support business operations, expand, and develop sustainably. If a company operates effectively and grows strongly, the value of its stock will increase, generating long-term profits for investors. Therefore, investing in stocks can offer both short-term returns and a stable, sustainable profit channel in the future.
6.2 High liquidity
Unlike other investment forms like real estate, stock investment offers high liquidity, meaning you can easily buy and sell stocks quickly. With each trading session on the stock market reaching billions of VND, investors can flexibly execute buy and sell orders without difficulty. This helps reduce risks and provides greater safety compared to other investment channels.
6.3 Flexible investment
The stock market offers a large number of stocks from companies in various industries. Investors can easily choose stocks that align with their investment goals and strategies. Whether it’s stocks from large, reputable companies or emerging businesses with strong growth potential, investment opportunities are diverse, allowing investors to select promising stocks and optimize their profits.
In conclusion, investing in stocks not only helps generate quick profits but also provides long-term stability when done correctly. Equip yourself with solid knowledge to fully seize investment opportunities and achieve success in the stock market.
