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Can cash flow from stocks ‘flow’ to real estate?

Avatar of Nick John By Nick John Dec10,2023 #estate #stocks
Can cash flow from stocks 'flow' to real estate? 5
Can cash flow from stocks 'flow' to real estate? 5

After the uncertain stock sessions last week, many experts predict that the market may have a mentality of shifting capital flows from stocks to real estate according to the `venting tank` rule between the two asset markets.

Observing the investment market over the past two decades, Ms. Nguyen Thi Thanh Huong, General Director of Dai Phuc Land, said that during many ups and downs, these two channels were connected.

Ms. Huong analyzed that thin, short-term capital flows often land in the stock, gold or foreign currency markets because these channels are highly flexible and with little capital, it is difficult to access real estate assets.

According to CEO Dai Phuc Land, after witnessing panic sessions in the stock market, large capital flows can rearrange their priorities and redirect more into real estate.

`Investment must consider taste, but the final destination, efficiency decides everything. With the dual characteristics of investing with a good profit margin while limiting risks or accumulating and exploiting and using, real estate

Nearly 300 codes on HoSE hit the floor, including the entire VN30 group in the afternoon session of January 28.

Sharing this opinion, Mr. Tran Khanh Quang, General Director of Viet An Hoa Company, who has more than 20 years of experience in the banking and finance industry and real estate, analyzed after the week VN-Index plunged at the end of the month.

CEO Viet An Hoa cited that if we review real estate at the bottom during several crises over the past two decades, including the strongest recession, housing prices decreased at most by only 35-50%.

On the contrary, stocks increase and decrease very quickly, the amplitude is only limited by days, and once they have plummeted, the domino impact on market psychology is huge.

Even during the session when the VN-Index lost more than 73 points, making stock investors confused, Ms. Trang Bui, Senior Director of JLL Vietnam also predicted that in the near future, there will likely be a wave of line shifts.

This expert explained that if this capital shift occurs, this is not a new phenomenon because it is not the first time money from stocks `runs` to real estate.

Meanwhile, the deputy general director of a foreign-owned securities company in Ho Chi Minh City said that the transfer of money from securities to real estate to realize assets is not yet massive enough to form a trend.

`The cash flow at this time is withdrawn just to rest to celebrate Tet and still wait for the opportunity to return to the stock market when the market is more exciting,` he said and affirmed that there is still no clear signal to determine whether the stock market will reverse and increase to a higher level.

Sharing the same opinion, Mr. Le Anh Tuan – Research Director of Dragon Capital Vietnam Investment Fund Management Joint Stock Company (DCVFM) added that the shifting trend is not easy because `not everyone who invests in stocks can finish investing.`

According to Mr. Tuan, people often feel that stocks are an unsafe investment channel because the numbers fluctuate continuously every minute and every second, while real estate brings a more secure feeling when it is a tangible asset.

After the period of strong stock growth at the end of 2020, Deputy Dean of the Faculty of International Business – Marketing of Ho Chi Minh City University of Economics Huynh Phuoc Nghia commented that cash flow could diverge, with one direction remaining to catch the bottom of stocks or the other.

This expert further analyzed that there are basically 3 interconnected vessels of the capital market including: securities, real estate and banking.

Stocks are a second vent with high flexibility and fast fluctuations, the advantage is that it accepts all capital flows from small to large.

Real estate is more passive than other vents but is a traditional investment channel, according to Vietnamese culture.

Mr. Nghia said that it is still too early to conclude where the money flow will move after strong market ups and downs.

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