Gold has been the most profitable investment asset in Vietnam since early 2020, with a profit margin of 50% over the last three years, beating bank deposits, the U.S. dollar, and stocks.
Global geopolitical tensions and downward economic trends have pushed gold prices up by over 50% since the Covid-19 pandemic began. Gold prices had hit VND68 million ($2,900.09) per tael by the end of last year.
A supply shortage also pushed gold bar values up in Vietnam. This also sometimes pushed domestic fluctuations in different directions from global trends. There were times when a tael of gold (37.5 grams or 1.2 ounces) in Vietnam was VND20 million more expensive than global rates.
If an investor had put VND100 million into gold in early 2020, they would have fetched VND150 million selling it at the end of last year.
If they had sold it in March last year when gold peaked, they could have gained 60% in profit.
Demand for gold is set to rise this year as economists anticipate a global recession, which could trigger investors to buy more of the safe-haven metal.
A deposit of VND100 million into the bank before Covid could have fetched an investor VND125 million by the end of last year.
Although there were times when interest rates declined, rates went up to 8-11% year-on-year in the second half of 2022.
Banks are likely to maintain high interest rates until mid-2023, according to analysts from Vietcombank Securities. Experts then expect rates to flatline before dropping gradually.
As the VN-Index barely inched its way up a meager 4% between January 2020 and December 2022, most investors have not gained much from stocks over the last three years. Some have even posted big losses since the market began a plunge in March last year.
However, investing in a well-performing exchange traded fund, such as Vietcombank Fund Management’s VCBF, could have resulted in a profit of around over 32% since Covid began.
The U.S. dollar has not been a profitable investment over the last three years as it only crawled to gain 1% in value over the period, according to Vietcombank rates.
Although the greenback climbed to new heights in the third quarter last year, it cooled off quickly and started to slide in the last quarter.
SSI Securities Corporation analysts expect that there will no longer be strong fluctuations in the dollar this year as the U.S. Federal Reserve is set to stop increasing its policy rates by mid-2023.
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