Securities business operations Part 2 - Thai Ba Can

especially establishing buying and selling rules from historical market studies, rules based on the question of how the market is actually behaving, and how it has behaved in the past, rules based on scientific statistics rather than on personal opinions or biases. The more you understand about a stock's past, the more accurately you can see future opportunities. Daily price fluctuations can be intimidating to even the most experienced investor, but a look at the past will help us understand that there is an upward trend in the market as a whole. Cycle after cycle, they create truly great opportunities for investors.

- Don't buy cheap stocks

Don't invest in penny stocks with the expectation of making a profit and thinking that the hot stocks have reached their threshold, the nature of the stock price also partly reflects the expectation on it. It is better to buy 100 shares at 60,000 VND per share than to buy 600 shares at 10,000 VND per share. Large securities investment organizations will put millions of dollars into 60,000/share stocks and stay away from penny stocks. And you should know that large securities investment organizations do most of the trading in the market and can really affect the price.

Penny stocks are often a favorite among new investors. The stock market is a two-way auction, with stocks trading at prices that are approximately equal to their value at the time of the transaction. When you buy a penny stock, you only own what is as cheap as the stock you bought. Penny stocks are very risky.

Learn to admit your mistakes

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No one wants to admit they are wrong, everyone always thinks they are right!? Our failures are just due to bad luck, due to the market's mistakes, and one day the market will realize that mistake. Therefore, we easily let our ego take over when executing transactions. Or we are too blind, too suspicious.

investing in stocks without an objective view of the market. This can easily lead to wrong decisions.

A valuable tool to combat these emotions is to conduct a review of all your trades, charting the times you bought and sold and the reasons why you bought or sold those stocks.

Then break down your winning and losing trades. How accurate were you in judging which stocks went up, and how wrong were you in judging which ones didn't.

Then develop new rules that will help you make profits and prevent similar mistakes in the future. If you don't look back at what you did wrong, you will never become a good investor.

Many people think that stocks can make us rich overnight, this is completely impossible. Success requires time, perseverance and an objective, honest look at our own mistakes.

It is the key to success in all areas of life.

living.

5.2.2.4. Combining fundamental analysis and technical analysis

In investing we cannot buy and sell based on emotions, we need a system of principles to choose the best securities as well as the most appropriate time to buy them.

Fundamental analysis looks at a company's earnings, earnings growth, sales, profit margins, and return on equity. It helps you pick quality stocks.

Technical analysis helps you read charts, look at stock prices based on trading volume to find the right time to buy and sell.

The combination of fundamental and technical analysis is one of the keys to achieving success in stocks.

5.2.2.5. Choose the right time to buy

Particularly successful stocks often form base patterns. These base patterns often form just before the stock breaks out of old highs into a new base and produces large profits.

The right time to buy a stock is at the “pivot point,” the end point of the base area pattern when the stock is making new price levels. Don’t try to chase the price past the pivot point by 5%, your risk of normal market corrections actually increases significantly.

On the day the stock breaks out of the old price level, the trading volume will increase by at least 50% above the average trading volume.

Remember you want to buy stocks when they are going to new highs, 98% of individual investors don't buy this way, that's why only a few become successful investors.

The increase in trading volume during the previous day along with the increase in price is a positive sign.

An increase in trading volume the previous day along with a decrease in price is a bad sign.

The price drop coupled with a drop in trading volume indicates that there were no large sales.

5.2.2.6. Signs to recognize when the market is at its peak

Three-quarters of all stocks, no matter how good or bad, eventually follow the general market trend. So learning to recognize when the market has topped is crucial.

After the market has distributed for four or five days within two or three weeks, it will usually turn downward.

Typically, distribution is indicated when the price closes lower than the previous session with increased volume, or a day that attempts to stall the rally (very small change in price) with larger volume than the previous day.

first. Then review your portfolio and look for stocks that are showing signs of selling. Sell them.

5.2.2.7. Signs to recognize when the market has bottomed out and is turning upward

A bear market creates fear and hesitation, when stocks bottom out, they go up and start a new cycle that brings with it great opportunities. But most people don't believe this.

At some point along the way down, stocks will attempt to rally. A “rally” is an attempt by an individual stock or the market as a whole to reverse course and rise after a period of falling prices.

Market crashes typically rise in a few waves, interrupted by a few failed attempts at recovery after one to three weeks, sometimes up to five, six weeks or more.

Eventually one of these attempted recoveries will pick up momentum for the market to move higher. A build-up day occurs when one of its major indexes rises 1% or more with a jump in volume from the previous day. This day usually occurs on the fourth to seventh day of an attempted recovery.

Tracking the market's top stocks can give accurate signs when the market is peaking.

Most technical tools for looking at the market are of little value. Psychological indicators can help identify changes in market corrections.

5.3. Securities trading activities of other financial institutions

Financial institutions are large investment organizations that control the size and quality of the stock market because they invest and manage the majority of securities in the stock market. They also control the majority of money funds and are fully equipped with investment tools and skills. However, their ability to trade securities varies depending on the nature of the market, the market structure, and the legal regulations of each country.

The proportion of securities investment by financial institutions is often higher than that of individual investors in developed countries.

Financial institutions play a very important role. Thanks to financial institutions: The economy is provided with long-term investment capital through securities underwriting and investment activities; Stabilizes the securities market; Popularizes securities through indirect investment for small investors; creates a channel for mobilizing foreign capital; increases accuracy in corporate management.

However, through the activities of financial institutions, they can distort stock prices and increase stock risks because they hold and manage premium stocks. On the other hand, they can have their assets controlled by the government.

The way financial institutions (insurance companies, finance companies, investment funds, etc.) conduct securities business depends on the commercial banking organization model in each country. In countries following the universal banking model, these financial institutions are allowed to directly conduct securities business in a specialized department of their own, in compliance with professional ethics. There, securities operations are completely separate from banking operations. In countries following the specialized banking model, institutions must establish their own securities companies in the form of limited liability companies, joint stock companies, etc. to conduct securities business. Securities companies must register their securities business with the National Securities Commission to apply for a business license. Depending on their capacity, they can conduct one or more securities operations according to the law. Only securities companies that have regulations on securities business activities in their charter are allowed to practice this profession. At that time, in the organizational structure of the company, it is necessary to establish a securities investment department, or a securities trading department with full necessary conditions on human resources, facilities, capital, information, etc. according to the law. The securities trading process is carried out according to the operating regulations of securities companies issued by the State Securities Commission.

Chapter 5 review questions

Question 1: Classify investment funds according to investment purposes?

Question 2: Please classify Investment Funds according to capital mobilization structure after establishment? Question 3: Please classify Investment Funds according to investment objects?

Question 4: Please classify investment funds according to the level of freedom in management ? Question 5: Please classify investment funds according to the form of organization?

Question 6: Analyze the advantages and disadvantages of a corporate investment fund? Question 7: What procedures must be followed to establish a contract investment fund? Question 8: Describe the capital mobilization activities of an investment fund?

Question 9 : Normally, the fund investment process consists of 6 steps, what are those steps?

Question 10: What are the costs associated with an initial public offering of an investment fund?

Question 11: What are the basic costs related to the fund's operations after establishment and investment activities?

Question 12: What are the sources of investment fund income?

Question 13: What are the main sources of revenue for the Fund? Question 14: What is the investment purpose of individual investors?

Question 15: Please analyze why investors have to "cut losses"?

Question 16: What are the important things to know when investing in stocks?

Question 17: Why should individual investors follow a system of principles instead of acting on emotions?

Question 18: Why is it necessary to combine fundamental analysis and technical analysis? Question 19: When is the right time to buy stocks?

Question 20: What are the signs to recognize when the market is at its peak?

Question 21: Please describe the signs to recognize when the market has hit bottom and is turning upward?

Question 22: The value of fund certificates of fund F purchased by investors at the beginning of the year when the fund's NAV is 12,000 VND, there is a capital gain distribution of 1,000 VND and

The income distribution is 300 VND. The NAV at the end of the year increased to

14,500. What was the total income for that year (TR)?

Question 23: The value of fund certificates of fund D was purchased by investors at the beginning of the year when the fund's NAV was 11,200 VND, there was a capital gain distribution of 850 VND and an income distribution of 250 VND. The NAV at the end of the year increased to 13,800. What was the total income of that year (TR)?

Question 24: The value of fund certificates of fund M was purchased by investors at the beginning of the year when the fund's NAV was 21,400 VND, there was a capital gain distribution of 1,500 VND and an income distribution of 500 VND. The NAV at the end of the year increased to 23,900. What was the total income of that year (TR)?

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