Retail investors in the Vietnamese stock market are a committed bunch but they rarely end up on the winning side.

“I’ve lost a lot of money in the stock market since I bought my first shares in 2001,” says Binh, who was lured to the Ho Chi Minh Stock Exchange by the thought of easy and juicy profits.

“My parents were upset when they learned I’d bought some shares. They think the stock market is simply a casino,” the 29-year-old bank worker told Thanh Nien Weekly.

Binh is a member of that often perplexed class known as retail investors, the small-timers who wade into the murky waters of the stock market equipped with little more than a tip here and a hunch there.

Unlike most of his brethren, Binh shuns online trading and prefers to visit his stockbroker’s office as often as he can.

Mixing with market movers

“Every brokerage has these huge electronic tickers displaying real-time share prices, but they’re not the real reason I go there,” Binh said.

“What I do when I arrive is look for the people who seem to be wealthy investors and park myself next to them, hoping to find out which stocks they like, what they are buying. Then I imitate them.”

He thinks many other retail investors adopt the same tactic.

Binh has never bought into an initial public offering and steers well clear of the over-the-counter (OTC) market for unlisted company shares.

In both cases it’s the absence of freely available information about these companies that puts him off.

With OTC shares, there’s the added difficulty of trying to trade them, as most transactions take place in coffee shops and other such salubrious premises.

Or, as Binh puts it, “I avoid them because of the lack of transparency and liquidity.”

Fast money

Like many retail investors, he prefers speculating and taking a quick profit to buying shares and sitting on them for a long time.

“I know some guys who buy and hold, but the returns on their investments are pretty poor,” he says.

And as a speculator, Binh doesn’t care about dividends.

He has discussed market movements and stocks on many an online forum.

“You can get a lot of information about stocks from these boards but you also hear plenty of hot tips that turn out to be based on unfounded rumor and are worse than useless,” he says.

Staying abreast

Unlike Binh, Duy keeps close tabs on international markets and always checks what’s happening abroad before making an investment in shares listed on the Ho Chi Minh Stock Exchange. He usually places his orders by phone.

The 34-year-old executive with a big foreign company based in HCMC thinks the stock market offers good investment opportunities.

Duy, who also owns some real estate and dabbles in the occasional business venture, likes the ease with which listed stocks can be bought and sold.

But he too bemoans the paucity of company information in the public domain, and the sad fact that most corporate managers look after their own interests first and care little for the small shareholders.

Duy is both a speculator and a long-term investor who relies on the usual channels for information. “I watch Bloomberg, Yahoo Finance, CNBC, Marketwatch... to get news and other information about the stock market,” he says.

Raw deal

Minh Tuan from Hanoi says individual investors like himself are forever missing profitable opportunities because of the paucity of corporate information and analysis.

“We look everywhere but can find next to no useful analysis of listed companies, so we must turn to stockbrokers. But they always give sensitive information to their VIP clients first,” Tuan says.

“Once the sensitive data and inside analysis is released into the public domain, the small investors jump in. However, big investors who obtain the information earlier will sell their shares at the first opportunity and book the profit, leaving the small fry to take the blow when the market tumbles.”

It’s not what you know

Cat Tri, 27, a stock columnist for a city newspaper, has put nearly VND1 billion (US$56,085) into the stock market in the last three years, but it hasn’t gone well for him at all.

He knows a lot about finance, as he must in his present occupation, and is an avid student of the stock market. Yet he has lost heavily and blames the big boys.

“The market is driven by institutional investors who have piles of cash at their disposal,” Tri laments.

Nguyen Hai Son, deputy director of the brokering department at FPT Securities, reckons retail investors tend to rely on their gut instinct to decide when to buy and when to sell.

“They are easily steered in the wrong direction by the institutions, who keep creating bull traps and bear traps for the unwary to fall into,” Son says.

As many people can attest, investing in the stock market is like buying a ticket on a roller coaster.

And there’s no better example than the Ho Chi Minh Stock Exchange, where the VN-Index plummeted by two thirds in 2008 but has since soared by 72 percent, making it one of the world's worst then best performers.

Market comment

Ngo Thanh Phat, chief investment analyst at Vietnam International Securities Co. (VISecurities), thinks September could be a good month for Vietnamese stocks.

“We have seen more money flow into blue-chip stocks. The government is confident of stronger growth in the domestic economy next year, and there is speculation that there will be more financial support from the government to stimulate economic growth.

“There are also reports that the global economy is bouncing back and that the US, which is one of Vietnam’s major export markets, is recovering well.

“This means that the fundamentals are sound and so investors should stay exposed to the market.

“The accepted wisdom is that stocks slide in September as a rule, but I doubt it. I think we will have a rally this month.”