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Investment Strategy Report – June 2022: HARD TO GET BIG PROFITS IN SHORT TERM

“In June, we reckon that there will be not much steady information to affect the market, in both the positive and negative sides. In terms of valuation, many stocks with good fundamentals have dropped to a reasonable price range for long-term investment. However, looking at cash flow, liquidity will only improve slightly compared to the average level of May due to the lack of supporting information.

Considering the components of information, cash flow, or valuation, it can be seen that market is in a state of equilibrium - weak. As such, we think that a somewhat defensive investment strategy and setting medium and long-term goals will be more appropriate during this period. Accordingly, instead of "full margin" as before, investors should reduce the leverage ratio (or prudent investors could maintain the stock: cash ratio at 70:30), to save purchasing power and wait for opportunities in strong correction sessions. In the meantime, the disbursement needs "patience", waiting for the preferred stock to return to a good price range, instead of following the "FOMO" mentality as before.

In May, VNIndex recovered quite quickly after plummeting to 1,165 points. In June, we don't expect many similar sell-offs. VNIndex will fluctuate between 1,240 – 1,350 points until there are more catalysts to clearly form the trend.”