6 Effective Ways to Learn Online Stock Investment for Beginners

The stock market is one of the most important profit channels today; however, many people still do not fully understand the available product types and how to start trading effectively. This article will help you grasp basic concepts, from which you can develop an investment plan suitable for your financial goals.

What Is Stock? Understanding Basic Concepts

(Stock), also called shares###, is a financial instrument representing ownership rights or legal benefits of investors toward an issuing organization. Stocks can exist in paper form, electronically, or in book-entry form, and are traded on specialized stock exchanges.

Besides underlying stocks, the market also offers derivative financial products such as indices, futures contracts, and exchange-traded funds. Because prices constantly fluctuate according to the market, stocks are an investment channel with the potential for higher returns compared to traditional investment forms.

Popular Stock Investment Products in Vietnam

The Vietnamese stock market now offers a variety of products similar to international markets. Below are 6 main types of products that investors can access:

( 1. Initial Public Offering (IPO))

An IPO (Initial Public Offering) is common stock issued by a company or enterprise to the public for the first time to raise capital. IPO shareholders will enjoy the usual rights from the issuing company.

Strengths of IPO:

• Significant long-term growth potential
• Usually low purchase price with high profit expectations
• Transparent, publicly available stock prices

Limitations of IPO:

• Very difficult to buy stocks at the time of issuance
• High price volatility, greater risk than regular stocks

2. Single Stocks - Direct Choice

Single stocks allow shareholders to confirm ownership of a part of the company. There are two main types: common stocks (with voting rights, board candidacy) and preferred stocks (with priority dividend payments but no voting rights).

Benefits of single stocks:

• Reduced transaction costs - pay only when buying or selling
• Higher long-term profits compared to gold, silver
• Full control over buy/sell timing
• High liquidity on the exchange

Challenges of single stocks:

• Difficult to diversify a portfolio with limited capital
• Time-consuming research and management
• Easily influenced by personal emotions

3. Stock Index - Easy Diversified Investment

A stock index is a collection of many stocks or bonds representing a specific market segment. In Vietnam, the VN30 index includes the 30 strongest (accounting for about 80% of market capitalization) listed on the HOSE. Additionally, investors can access international indices like S&P 500 (top 500 US stocks) or DJIA.

Advantages of index investing:

• Automatic risk diversification when buying an index
• Cost savings due to fewer transactions
• Saves time and effort in research
• Reduces emotional decision-making, increases stable profits

Disadvantages of index investing:

• Profit is limited by the drag of weaker companies in the basket

4. Exchange-Traded Fund (ETF)(

An ETF )Exchange-Traded Fund( is an investment fund holding many underlying assets, allowing buying and selling shares like trading company stocks. In Vietnam, FTSE Vietnam ETF was established in 2008, and currently, there are 7 active ETFs, with 3 large-scale funds )accounting for over 90% of total value(.

Advantages of ETFs:

• Automatic diversification
• Easy to trade with low costs
• Some ETFs support options trading

Disadvantages of ETFs:

• High commissions depending on the trading platform
• Small trading volume leading to high bid-ask spreads
• Some funds are subject to high tax rates

) 5. Stock Index Futures - Derivative Trading

Index futures are derivative financial contracts where two parties agree on the price of an index at a future date. In Vietnam, futures contracts based on the VN30 index have different maturities ###1 month, 2 months, quarterly(.

Advantages of futures contracts:

• Enable short selling without owning stocks
• Can use leverage to increase profits
• Applicable for various investment strategies )technical analysis, etc.(

Risks of futures contracts:

• Large lot sizes suitable for investors with substantial capital
• Continuous portfolio monitoring required
• Complex trading methods for beginners

) 6. Stock CFD (Contract for Difference)###

CFD is a trading style where investors do not own the underlying asset but trade contracts with providers. Unlike actual stock trading, CFDs allow high leverage, flexible Long-Short orders.

Advantages of CFDs:

• High leverage enables market access with less capital
• 24-hour trading with global tools
• Low margin requirements, instant trading

Risks of CFDs:

• Losses can exceed initial investment when using leverage
• Limited rights compared to common stocks

Stock Trading Platforms and Brokerage Companies in Vietnam

According to HOSE data, the top 10 largest domestic brokerage firms include:

• SSI Securities Corporation (SSI)
• Ho Chi Minh City Securities Corporation (HSC)
• Bản Việt Securities Corporation (VCSC)
• VNDirect Securities Corporation (VNDS)
• Mirae Asset Securities Corporation (MAS)
• VPS Securities Corporation (VPS)
• MBS Securities Corporation (MBS)
• FPT Securities Corporation (FPTS)
• Maybank KimEng Securities Limited (MBKE)
• Bank for Investment and Development of Vietnam Securities Corporation (BSC)

These brokerage firms provide products such as stocks, fund certificates, warrants, bonds, and operate on both HOSE and HNX exchanges.

Important Terms When Learning Online Stock Investment

When starting to learn online stock investing, you will encounter many specialized terms:

Stock bonus - A method of raising capital by splitting stocks. For example, 1 stock with a face value of 100,000 VND can be split into 2 stocks with a face value of 50,000 VND.

Treasury stock - A company repurchases its own shares from the market to reduce circulating shares.

ESOP stock - Privileged shares sold to employees at lower prices to retain talent.

OTC stock - Unlisted stocks on exchanges, potentially valued higher than their actual worth.

Bluechip stock - Shares of leading, stable companies with significant market impact. Examples include stocks in the VN30, HNX30 baskets.

Penny Stock - Very low-priced stocks of small companies, highly volatile, with high profit potential but also high risk.

Defensive stock - Stable, low-risk stocks. Includes essential sectors like electricity, water, pharmaceuticals.

Derivative financial tools - Besides stocks, you can invest in CFDs, futures, indices with greater flexibility, larger markets, 24/7 trading support, and diverse investment strategies.

Online Stock Investment Learning Journey - First Steps

To succeed in stock trading, you need to spend time learning technical analysis, updating market trends, and gaining practical experience through trading.

Basic steps to start:

1. Master basic theory - Understand product types, profit/loss calculations, risk management
2. Choose a suitable trading platform - Consider fees, tools, customer support
3. Practice with demo accounts - Get familiar with interfaces and strategies before using real money
4. Start with small amounts - Control risks when beginning
5. Monitor and adjust - Evaluate results, learn from experience, improve strategies

Success in stock investing does not happen overnight. Be persistent in learning, practicing regularly, and building disciplined trading habits to achieve your financial goals.