Investor Tips You Must Know About Stocks - From Basic to Advanced

When entering the stock market, not everyone knows that studying theory is just the first step. True success comes from combining knowledge, practical experience, and a solid mindset. Below are the essential things experienced investors always follow regarding stocks.

Choosing a Path That Fits Your Personality

The first thing when entering stocks is to clearly define your goal: do you want to make short-term profits or build long-term wealth?

Short-term investing requires you to monitor the trading board constantly, grasp daily, even hourly, fluctuations. This method relies heavily on technical analysis, trading based on market news, and using leverage to increase profits. High risk but also higher potential returns.

Long-term investing is different. You need patience to select good companies, analyze financials thoroughly, and hold for many years. The returns may not be as high as short-term trading but are much more stable.

Identifying this style early will help you know what to learn, what knowledge to prepare, and especially how to manage your psychology. Warren Buffett, one of the greatest investors, always emphasizes that patience and disciplined adherence to strategy are the keys.

Do Not Put All Funds Into One Basket

Diversification is a valuable lesson that all successful investors learn. Instead of betting everything on one stock, split your assets into multiple portions: buy stocks from different sectors, or even invest in other asset classes like index certificates, forex, or cryptocurrencies.

When the bear market (bear market) hits, a diversified portfolio will lose value more slowly than holding just one stock. That’s why indices like S&P 500 or VN30 are popular—they have already done the diversification for you.

Warren Buffett advises long-term investors that investing in these indices is a simple yet effective approach. Although during a bull market (bull market), you might not earn as much as holding a single stock, but in the long run, the rate of return far exceeds savings or bonds.

Criteria for Choosing Worthy Stocks to Hold

If you choose the long-term investment path, selecting a good company is a life-changing decision. You need to read financial reports, understand development strategies, and evaluate their future product potential.

Signs of a stock worth holding:

The company has low debt—its short-term assets to short-term liabilities ratio (tài sản ngắn hạn chia cho nợ ngắn hạn) should be above 1.5. Revenue and profit grow continuously for at least 5 years (excluding periods of general economic crisis like COVID-19). Profitability indicators such as profit margin, ROE, ROA all increase annually. The company pays dividends regularly—this indicates confidence in the future. The leadership is trustworthy, with no record of deception or hiding information.

Look at the top 10 Vietnamese companies with the strongest stock gains over the past 10 years: Vicostone, Vingroup, Vinamilk, Hòa Phát, Bình Minh Plastic… All are large companies with high market share, and their leadership is continually recognized. These companies do not generate “flash” returns during hot markets, but they are good defensive assets when the market turns downward.

Adapt Flexibly to Market Trends

Markets are always changing, and so are people’s needs. Even long-term investors must periodically review their portfolios and adjust weights.

For example, in the real estate market. When COVID-19 broke out, the State Bank loosened monetary policy, lowering interest rates to stimulate consumption. Borrowing became easier, and real estate stock prices soared. But in early 2022, as inflation rose sharply, the State Bank tightened real estate credit. Demand for home purchases declined, and stock prices reversed downward.

Smart investors know how to reduce their real estate exposure when policies change, and instead increase positions in sectors that benefit. This doesn’t mean you have to sell everything, but rather adjust your balance appropriately to the new situation.

Risk Control — An Absolutely Non-Negotiable

Risks always exist in stocks. No matter your approach, protecting your assets is as important as seeking profits.

Basic tools for risk control:

Use stop-loss orders (Sell Stop): when the stock falls to your predetermined price, this order automatically sells, helping you cut losses promptly. Use buy stop orders (Buy Stop): to enter at a certain price level. Set stop points at 10-15% from your opening price. This helps manage risk—if you incur losses, they are within your tolerance.

A golden rule: never invest all your assets in a single trade. Only use idle money, savings. If you want to increase profitability, you can use margin— but you must understand that margin also increases risk proportionally.

Technical Analysis to Catch the Right Timing

Choosing the right time to buy and sell is the difference between big gains and losses. Experienced investors often use technical analysis—studying charts, patterns, indicators to determine optimal timing.

Two most common indicators:

RSI (Relative Strength Index)—measures price volatility. If RSI is below 30, the stock is being heavily sold (buying opportunity). If above 70, the stock is nearing a peak (sell).

Stochastic—measures trend strength. Above 80 indicates overbought (about to reverse downward). Below 20 indicates oversold (about to reverse upward).

Identifying stock bottoms—the secret to big profits:

When the price hits a new bottom but RSI or Stochastic rises, it signals weakening selling pressure—the price is about to turn. When the price makes higher lows than before, selling pressure has weakened, and an uptrend may begin. Large trading volume during declines indicates investors are bottom-fishing.

However, be cautious when bottom-fishing: it’s a game of chance. Only use a small part of your capital, don’t risk all assets. Avoid bottom-fishing in speculative or penny stocks—they can fall even deeper than you expect.

Psychology — A Often Overlooked Factor

One of Warren Buffett’s valuable lessons is: never lose money. To do this, you need to keep a stable mindset.

Markets are highly volatile. A position that’s making big profits can turn into a loss in 1-2 days. During such times, don’t panic and sell hastily—you’ll regret it later. Instead, analyze the reasons behind the volatility, then decide whether to hold or exit rationally.

Training your psychology isn’t through theory but through practice. Use demo trading to accumulate experience, analyze stocks daily, and monitor the market regularly. Knowledge is never enough; it must be repeated and practiced.

Conclusion

The essential knowledge about stocks isn’t a long list of complicated formulas. It’s a combination of clear strategies, strict discipline, prudent risk management, and a resilient mindset.

The journey of stock investing requires patience. Not everyone succeeds immediately, but those who persistently learn, practice continuously, and stick to principles will find their path to success. Start today, with small assets, clear goals, and an ongoing learning spirit.