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Why shouldn’t you invest in Vietnamese stocks?





That may sounds like a strange question to ask especially when this question comes from a financial advisor that currently focuses its investments in Vietnam. However it is also part of our job to tell the truth and there are unfortunately many reasons to avoid investing in Vietnamese stocks (the good news is that there are even more reasons to invest in Vietnamese stocks!). These include among other things the risks that you need to accept with such an investment but this also includes the administrative burden associated. When we talk about the risks, there are actually different types of risk: you have currency risk (a form of risk that originates from changes in the relative valuation of currencies) obviously but also the risks associated with investing in stocks in general (not necessarily Vietnamese ones), the risks associated with emerging markets with two sub-categories of risk: liquidity risk and political risks. Liquidity risk is simply the risk that your investment could not be traded quickly enough without impacting its market price, this might sound like a modest risk but it can have terrible consequences from time to time. Political risk is the risk that your investment could suffer as a result of political changes or instability in a country. It is fair to say that Vietnam’s political risk does not seem really high though. Another reason that many people often fail to take into account is the administrative burden which is indeed less obvious. This includes the time required to be able to start investing but also the not so easy task of money repatriation.

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