When gold prices were surging and at one point exceeded VND190 million per tael, Nguyrn Van Tuan of Hanoi was drawn into short-term trading with expectations of quick profits.With nearly VND1 billion in idle capital, he decided to buy when prices corrected to VND184 million per tael. 

He purchased two taels for a total of VND368 million. As prices continued to fall, he saw it as a “buy-the-dip” opportunity, adding one tael at VND180 million, then another at VND178 million to average down his cost.

In total, he spent VND726 million to acquire four taels of gold, with an average cost of about VND181.5 million per tael.

However, the market did not behave as expected. Instead of rebounding, gold prices continued to drop to VND170 million per tael. Mounting psychological pressure forced him to cut losses on one tael at VND168 million, taking a loss of about VND13.5 million.

At present, with the remaining three taels, selling at around VND165 million per tael would bring him VND495 million, implying an unrealized loss of nearly VND49.5 million.

Totaling both the sold portion and the remainder, if he decides to exit now, Tuan will suffer a loss of about VND63 million.

He said he did not expect such a rapid and steep decline, which completely derailed his short-term trading plan. He acknowledged being impulsive, continuously buying to average down without fully accounting for the risk of a market reversal.

At this point, selling means locking in a significant loss, while holding exposes him to ongoing anxiety as prices may fall further. He remains uncertain about what decision to make amid continued market volatility.

Should he cut losses?

According to Pham Thu Trang, a personal finance advisor, Tuan’s case is a typical example of emotion-driven investing during a market surge followed by a reversal.

The biggest mistake lies in chasing the trend when prices are already in a high zone, while gold is not a suitable channel for short-term "swing trading" strategies. 

Gold fluctuations are strongly affected by macro factors such as interest rate policies, the strength of the USD, or global market sentiment, causing prices to reverse quickly and unpredictably.

Furthermore, the "averaging down" strategy Tuan applied is only truly effective when the market shows clear signs of bottoming out. In a downward trend, continuously buying more does not reduce risk but instead increases the losses. 

Many individual investors often confuse "buying the dip" with "catching a falling knife," leading to more losses the more they buy.

Regarding the current problem, the decision to cut losses or continue holding needs to be based on the original investment goal. If he continues to follow short-term "swing trading," accepting an early loss is necessary to preserve capital and avoid falling into a cycle of larger losses.

Conversely, if there is the capacity for long-term holding and no borrowed capital is used, investors can consider holding on, as gold remains a safe-haven asset that can recover in a long-term cycle. However, in all cases, the most important factor remains investment discipline.

Experts recommend that every decision to spend money should be accompanied by clear take-profit and stop-loss levels from the beginning, rather than reacting to price fluctuations. 

At the same time, investors should avoid concentrating all capital in a single asset class and resist the urge to “recover losses” when the market moves against expectations. Risk management, experts emphasize, is far more important than chasing short-term gains.

According to finance experts, "asset accumulation" is a long-term strategy, but it is often misunderstood when detached from goals and implementation discipline.

Nguyen Manh Cuong, a financial consultant, believes that gold should only be considered a part of a portfolio, with its primary role being defensive, i.e preserving value against inflation and economic volatility, rather than a tool for generating steady growth.

If choosing to accumulate gold as an asset, investors need to accept prolonged periods of sideways price movement or even downward adjustments without reacting emotionally.

The most common mistake for many people is using a single asset class for multiple goals simultaneously. When expecting both safety and quick profits, investors easily fall into a state of psychological instability whenever the market does not meet their expectations.

Investors need to clearly separate: which portion of assets is for defense and which is for growth, thereby selecting the appropriate tools for each specific goal.

Tuan Nguyen