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Hello, greetings to you all. I am Andon. Welcome to my Andon Nguyen Official YouTube channel today. And welcome back to the macroeconomics lesson series.
Learn GDP basics, common misconceptions, and how to use GDP data for smarter investing in real estate, stocks, and gold.
Key Takeaways
- GDP measures the total value of final goods and services produced domestically, excluding intermediate goods to avoid double counting.
- Understanding GDP trends alongside inflation and interest rates helps investors identify economic cycle phases and make informed decisions.
- Foreign company production within a country counts toward that country's GDP, while domestic companies producing abroad do not.
- Nominal GDP, real GDP, and GDP per capita are distinct concepts important for accurate economic analysis.
- Taking notes and building a solid foundation in economic concepts is essential for applying macroeconomic knowledge effectively.
What the video covers
- Introduction to macroeconomics lesson series focusing on GDP as a key economic indicator.
- Explanation of GDP as the total value of final goods and services produced within a nation's territory.
- Clarification of principles in GDP calculation: counting only final goods, excluding intermediate goods except in inventory or exports.
- Distinction between nominal GDP, real GDP, and GDP per capita to avoid common misunderstandings.
- How GDP relates to economic growth and its importance for investment decisions.
- Introduction of a three-indicator formula (inflation rate, policy interest rate, GDP) to identify economic cycle stages.
- Practical guidance on reading GDP trends to time investments in business, real estate, stocks, and gold.
- Examples illustrating GDP concepts using simple analogies like a small town economy and production chains.
- Discussion on how foreign investment affects GDP calculation depending on production location.
- Encouragement to take notes and actively engage with the material for better retention.
Chapters
- 00:00Introduction and Course Overview
- 03:58Common Misconceptions and Media Influence on GDP
- 08:22Foreign Investment and GDP Calculation Principles
- 12:02Methods of Calculating GDP
- 16:26Household Spending and GDP Components
- 20:16Vietnam's GDP Data and Growth Rates
- 24:20Economic Cycle Phases and Investment Timing
- 28:22Credit Trends and Economic Signals
- 36:09Investment Strategies in Different Economic Phases
- 40:07Defensive Stocks and Hedging with Gold
Full Transcript — Download SRT & Markdown
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This is lesson number two in the macroeconomics course series for beginners. And our topic for today is what is GDP, along with common misconceptions about GDP and how to apply GDP to business, real estate, stock, or gold investments. I know that
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many of you, when studying economics, often want to grasp knowledge quickly to apply it immediately to your investment decisions. But economics is just like building a building. If our foundation is not solid, every floor we build on top will be shaky. Therefore,
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we will take clear, step-by-step measures to understand each concept and each indicator, then combine them into a solid theoretical system that can be applied in practice. And today, we will not only learn GDP by textbook definitions, but we will also unpack
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the misunderstandings that many people, even investors, still make. And most importantly, I will share with you how to read GDP so that it becomes a clear investment signal, helping you know when to buy and when to sell, regardless of whether you are investing
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in real estate, stocks, or gold. So do not skip these seemingly basic parts, because that is exactly where the keys to smarter and safer investing lie. And we will start our lesson today. In the previous video, I shared with you the
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difference between macroeconomics and microeconomics. And I also promised that I would reveal to you an extremely simple formula, which is the three-indicator formula. It helps us identify which stage of the economic cycle the market is in, thereby allowing us to choose the safest
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investment timing with the highest potential profit. So today, we will start with this formula. The three-number formula consists of three indicators as you can see on the screen here. The first indicator is the inflation rate, measured by the CPI, to
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tell us whether the currency is overheating or cooling down. Think of it that simply. The second indicator is the policy interest rate, which lets us know if the cost of borrowing money is cheap or expensive. And the third
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indicator we will learn about in today's lesson is the metric for measuring economic growth. Specifically, it is the GDP, which helps us understand whether the economy is robust or slowing down. Once you grasp the trends of these three numbers—
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whether they are rising or falling—you can read the market climate to know when it is a favorable season to invest and when you should be more cautious in your investments and business dealings.
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However, to apply this formula in reality, we cannot just look at the data and guess; we must clearly understand each concept within the formula to know what it truly means, when it is a good signal, and when it
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is a risk warning. Therefore, in today's video, we will begin by exploring the first concept in this formula, which is the economic growth indicator, GDP. We will clarify what GDP is. Why is it important? We will learn how to calculate GDP and
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distinguish between nominal GDP, real GDP, and GDP per capita to avoid common misconceptions about it. We will learn how to read GDP like an investor and apply it practically to business, real estate investing, stocks, or gold. And we will have completely different
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perspectives on GDP compared to how we have understood it in the past. Partly because of what we hear on TV and in the media. And of course, first, we will find out together what GDP is. But before we get to the lesson, I want to
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double-check to make sure you have your notebook and pens in front of you so we can write down this knowledge. Because if you just sit and listen without taking notes, nothing will really stick in your memory. So, taking notes is
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absolutely essential. I just wanted to give you a quick reminder, and now we will go into the example of what GDP is, which I will explain in a very easy-to-understand way. Let’s imagine our country is like a small town with a
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few thousand residents living in it. In this town, everyone works together to produce goods and services to sell to each other and to people outside the town, outside the territory. Once every year or every quarter, this town will
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record the total amount of money it earned from selling final goods, such as finished loaves of bread, completed houses, bicycles produced and sold to end users, or completed services like haircuts, transportation, consulting, beauty services, healthcare, and many other services in society. So, GDP is
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the total value of final goods and completed services within that national territory, calculated quarterly or annually. And the important principles when we calculate GDP are, first, the principle that we only count the value of final products, meaning products
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that are complete and ready for consumption by the end user. For example, a bicycle sold to an end user is sold as such, so the bicycle is the final product. We do not count the wheels separately because the cost of
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the wheels is already included in the price of the bicycle sold to the final consumer. That is the second principle: we do not count intermediate goods.
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Materials for production or spare parts used to create such final products will not be included in the GDP. Because as I just mentioned, we would have double counting since the cost of materials, supplies, and components is already included in the final selling price of
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that product. Except for a few exceptions, for example, if those materials or components remain in inventory until the end of the period or year, then when closing the books at the end of the year, we must count those inventories. This is because
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those components and materials have not yet been manufactured into a final product. But when we settle the accounts and calculate GDP for that quarter or that year, we record the value of the inventory as well. And the second case where we still include
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intermediate goods in GDP is when those intermediate goods are exported. For example, if we produce components or materials to export abroad and sell to other countries, even though they are intermediate goods, we produced them to sell internationally. This means that
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if those goods are exported, we still include their value in the GDP of our country. The fourth principle when calculating GDP is that it must include all products and services produced within that nation's territory. Yes, all goods and services produced
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domestically must be counted toward GDP. Regardless of whether the company producing those goods or services is a domestic firm or a foreign-invested company, all those products are counted toward that nation's GDP. For example, if Samsung comes and opens a factory in
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Vietnam, even though Samsung is a foreign enterprise with foreign investment, the goods produced on Vietnamese territory are still counted toward our domestic GDP. Conversely, if a Vietnamese company invests abroad and produces goods or services in a foreign territory, it is not counted, even
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though it is a domestic company. Because it is produced on foreign territory, it will be counted toward that country's GDP. For some easy-to-understand examples in a town, if a farmer produces flour to sell to a bakery, that is an intermediate good.
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Flour is an intermediate good. We do not count it toward GDP. But the bakery that produces finished bread to sell to the public, that bread is the final product, so we will count it as a final good or service toward GDP. When a
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barber cuts someone's hair, that is a final service, so it will be counted toward GDP. A workshop producing a bicycle frame to sell to a bicycle assembly plant produces an intermediate good, which is not counted toward GDP, but the finished bicycle sold to the
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end user is counted; or if that workshop produces flour and keeps it in stock until the end of the year without selling it to any bakery, it is also not counted. Even though flour is an intermediate product,
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inventory until the end of the year, we still include that inventory in the GDP . Next, for example, suppose there is a company producing bicycle tires in that town. And those bicycle tires are not sold domestically but are exported to a
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foreign country. So, although the bicycle tires are an intermediate product, since they are produced for export, that intermediate product is still counted in the GDP. To summarize this part, the correct way to calculate it is to only count final goods
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produced within the country's territory , excluding intermediate goods, with two exceptions: inventory and exports.
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If we were to include intermediate goods, everything would be added up, leading to double-counting, which would make the GDP an unrealistic and artificial figure. This is because the cost of intermediate goods is already included in the price of the final
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product. In conclusion, GDP is the total amount of money a country earns from selling all completed products and services within a year or a quarter.
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It’s like adding up the total revenue from selling all food, clothing, vehicles, housing, and medical services within that country over a reference period. For example, a year or a quarter. That is a very simple definition to help everyone understand
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what GDP is. Why do we keep hearing about GDP in the news and on TV, yet only have a vague understanding of it?
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Today, I will explain it thoroughly but in a way that is truly easy to grasp.
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Next is how the GDP index is calculated ; there are three common methods to determine a nation's GDP. The first method is to add up all the expenditures of that nation. Summing them all together will give us the
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total products and services of that country. The second method is to sum all income, and the third is to sum all value-added components. But here, I will only share with you the most popular method, which is also the
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easiest for everyone to calculate. Because we don't need to be financial experts, we don't really need to know all these things. Knowing the easiest and most popular method is enough.
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Because the data for this formula is easy for you to find online to calculate the GDP index. That is the method of summing up all the nation's expenditures. Here is the formula to calculate a country's GDP: C + I + G +
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(X-M). Each indicator represents: C is household consumption, I is investment, and G is public expenditure, also known as government spending. Just get an overview first, then I will go into detail on each one so you can understand. The X-M part represents the
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trade balance. The balance is equal to exports minus imports. So, let's go through each of these indicators to see what they mean. First is this C indicator. It is the household consumption index. What is it? It is the money that people spend to purchase
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final goods and services for consumption. For example, food, clothing, essential products, new motorcycles, haircuts, medical exams, beauty services, and healthcare. In general, this consumption index includes all essential spending by people, and goods counted toward household consumption for GDP must be
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new. For example, if you buy a new car, its value is counted in household consumption and added to GDP. If you buy a new television, it is counted in GDP. If you buy a new refrigerator, it is counted in GDP. And expenditures
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such as buying old goods or second-hand items will not be counted in GDP. Because when you buy an old car, it does not increase the GDP. Since that car was already counted when it was first sold. Next, it only includes
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household expenditures. As for expenditures such as buying stocks or bonds, those are just transfers of money. They are not purchases of newly produced goods and services, or goods you buy from abroad—like items carried in your luggage or ordered from
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overseas—even if they are essential goods in your life. For example, if you buy a phone or a television from abroad , those are considered import factors, so we must include them in this M portion. This means they are counted as
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imported goods, not as domestic consumption expenditures. That's it. Because when you buy goods from abroad, they must be counted as imports rather than domestic household consumption. So we count them in this M portion. For instance, if Family A spends 10 million
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on food, 5 million on clothes, and 3 million on medical check-ups, the total C for this family is 18 million. Moving on, the second indicator in this formula is I. That is the amount of investment. This is the money that
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businesses and citizens in a country spend to create new production capacity for the future. It includes fixed business investments such as buying machinery, production lines, building factories, and investing in equipment; those are business investments. Or when citizens and businesses invest by
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building a new house; since a new house is a newly created product, it will be counted in this I portion instead of the C portion. What is the difference between C and this? For example, when you buy an essential product for your
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daily life, that product was already produced in the economy by another company. For instance, when someone produces a car and sells it to you, that product was already produced and available in the economy, so when you buy it, it counts as household
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consumption. But for a house, the value of that house is something you cannot just go and get from anywhere, you have to build it, so a new house counts toward I, not C or inventory investment . Those are goods that have been
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produced but remain unsold by the end of the year, so they are temporarily counted in the GDP of that year. And this part I does not count or include types of spending like buying stocks, bonds, or land. Because that is
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financial investment or asset transfer. It does not create new products or services, so it is not counted in GDP.
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Next is the letter G, which represents government spending, also known as public spending. So, what is public spending? It is the money the government spends to purchase goods and services, such as building roads, paying salaries for public servants,
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teachers, and doctors, buying medicine for public hospitals, purchasing government vehicles, developing infrastructure, and providing public services. That is what public spending is. And this public spending does not include things like subsidies, pensions , or unemployment benefits because that
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is a transfer of money to citizens, not the purchase of new goods or services.
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Therefore, payments like subsidies, pensions, or benefits for citizens are not counted as public spending. Or, for instance, money that the government uses to repay foreign debt; while that is an expenditure, it isn't counted as public spending because it is merely a
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transfer of funds and does not create goods or services, so it's not included . Next, this X minus M represents the trade surplus, which is exports minus imports. X stands for exports, which are goods and services produced domestically and sold abroad, so they
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are added to the GDP. As for imports, these are goods and services produced abroad that we bring into our domestic market, so that amount must be subtracted so it doesn't get mixed into our GDP. And why must we subtract these
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imported goods? Because C, I, and G already contain these imported items within them. As I mentioned earlier, our household consumption can also include imported goods. Can investment also include what? It can also include imported goods, or our public spending
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might involve imports as well. Therefore, subtracting these imports helps us retain only the portion produced domestically. Because all the money spent on imports from household consumption, investment, and public spending is used to buy goods from abroad. They are not domestically
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produced goods, so we must subtract them. And that is the simple formula we can use to calculate GDP. So, you can just remember it simply as follows: C represents consumers buying things for use. Investment represents buying machinery, building factories, new
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houses, and increasing inventory. Public spending is the state buying goods and services. X minus M is sales to foreign countries minus purchases from foreign countries. So, when we add up all these indicators—household consumption, investment, public spending, and net exports—Vietnam's
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GDP for 2024 is estimated to reach approximately 470 billion dollars. Vietnam's GDP growth rate compared to the previous year, 2023, increased by about 7%. And Vietnam's GDP per capita at that time reached about 4,700 dollars, an increase of nearly 400
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dollars from the year before. And if you look back five years to 2019, Vietnam's total GDP back then was only around 330 billion dollars, approximately that much. You will see that over the last five years, Vietnam's GDP has grown quite well,
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with an average annual growth rate of about 6 to 7%. So now, we need to apply this knowledge to reality to understand what changes, growth, or declines in GDP mean for the economy. I have a spreadsheet here so everyone can look
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at it visually. First, let's look at the first column, which shows the possible scenarios for GDP. The first case can be called an economy in spring , where everything is growing very well and GDP is rising steadily. This is a
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situation that any country tries to control and regulate the economy to ensure that GDP grows in a stable manner. Many people think that the faster and stronger the GDP grows, the better, but that will certainly cause negative impacts on other economic
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factors. For example, if GDP grows too fast or "overheats," it will cause inflation, which must be curbed; otherwise, it could lead to a bubble burst. So, stable GDP growth is a result that the government and the people desire more than having GDP grow
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too quickly. And the signs for us to recognize the spring phase of the economy, where GDP grows steadily and inflation is low or stable, include signs such as GDP growing for two to three consecutive quarters and CPI hovering around 2 to 4%, with very
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stable prices. CPI is simply the inflation index. When prices do not rise too quickly or too sharply, and do not fall or suffer from deflation, then the stable level for this CPI index falls between 2 and 4%. In the next
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lesson, we will learn more thoroughly about this index. And next is the PMI index. This is an index that is quite unfamiliar to most people. So, you can just understand it simply as what? This PMI is an index that measures the
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health of the economy, especially in the manufacturing or service sectors, based on the models of those businesses . For example, whether that business's output this month increased or decreased, and whether they are hiring more workers. If they are hiring more,
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it shows that the business is doing well, right? Whether inventory is high or low, or if there are many new orders or few, so to simplify it, what is it?
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What does this PMI represent? Whether businesses, factories, and production units are busy or not, it is a number averaged from 0 to 100. If this PMI index is above 50, business activity is expanding, meaning the economy is healthy. But if PMI falls below 50, it
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means that production and business activity are contracting, so the economy is weak. Therefore, this PMI is also a quite useful index for us to assess the climate of the economy at that stage. So first is whether GDP has
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grown consecutively in recent quarters. The second is, what level is the CPI at ? If it is stable between 2 and 4%, it is good, and prices are not increasing too much. Is the manufacturing business sector dynamic, is it above 50 or below
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50? And if employment increases or decreases and retail sales are strong, then factors like these show that the economy is in its spring phase. And that is when GDP grows steadily and inflation remains very low and stable.
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Specifically at the present time, looking at recent quarters in 2025 for the Vietnamese economy, our Q1 GDP grew by about 6.93%. compared to the same period last year. As for the second quarter, GDP grew even more positively.
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It reached about 7.96%. This means you can see that in recent quarters, our Vietnamese GDP has been growing quite well and is very stable. So that is a quite positive signal at this moment.
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But conversely, the inflation index, this CPI index, is expected to be around 4.5%to 5%, which is not too high but is exceeding the stable price level . Because in reality, we see this situation happening all over the world
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at this time. When various assets, spending types, and consumer products are facing inflation due to many economic and political factors, and even wars globally, input materials like oil, gasoline, and gas have increased, so naturally, subsequent goods are also affected by the rising
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costs of production materials. So Vietnam's CPI being around 4.5%to 5%is also completely understandable. And for the country's goals in 2025, officials are aiming for Vietnam's GDP to be over $ 500 billion and GDP per capita to reach about $ 5,000. But on the other
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hand, Vietnam's PMI index measured in May 2025 only reached 49.8 points. It is nearly at the 50-point threshold. It shows that our production activity is relatively stable, but still weak and has not yet met reasonable expectations . And even by June 2025, the PMI index
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fell to 48.9 points. That was the third consecutive month that the PMI index remained below 50 points. However, in contrast, this past July, July 2025, the PMI jumped back up to 52.4 points, which was the first time it crossed the
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50-point mark in several months. We can see that the manufacturing sector has started to expand again despite difficulties from tariffs and periods of weakened exports. Those are definitely positive signals. Actually, for newcomers, looking at these listed indicators might feel a bit
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overwhelming. But we can check all of this ourselves; we can search on Google to see how these indicators have recently changed and fluctuated. Keep in mind that we must verify credible sources; mainstream government or state newspapers will provide more reliable
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indicators. Even with these indicators, we can see that GDP is still growing. But perhaps this GDP growth, which I will discuss later, is not entirely due to production growth, but might be growth driven by inflation. This means high inflation can boost GDP growth;
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for example, if a car cost 1 million VND last year, it might cost 1.2 million VND the following year. So that inflationary amount, even though the currency has devalued, is still counted in the GDP, meaning GDP is also
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affected by inflation. Because during this period, we see that CPI is being forecast at a level higher than the 2 to 4%range, right? And our GDP is currently forecast to be in the range of about 4.5 to 5%. And this PMI index
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isn't actually very high at the moment. It’s not just Vietnam, but every country in the world is currently in a phase that isn't exactly seeing strong growth, yet it’s not a downtrend either; it’s still in the final stage
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of an uptrend. Meaning that achieving strong growth right now is very difficult. It’s a lot like what we see in technical analysis. An upward trend in a wave consists of three stages. The early stage of an uptrend, the middle stage, and the final stage.
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Of course, we don't know exactly where the end point is, but we do know that this current phase is still within an economic uptrend. It’s still an uptrend, but it’s somewhere in the distribution phase at the peak, so we
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must be very cautious about that. Moving on to the second scenario for a nation's GDP, which is when GDP is growing very rapidly and inflation is high. When inflation is high, the Central Bank obviously has to raise interest rates to curb that inflation.
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The sign of this phase is that GDP growth exceeds the trend. Perhaps it was growing at 6-7%over the last few months, and then suddenly it jumps to 8 , 9, or 10%, meaning it’s growing too aggressively. And when the CPI is
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higher than 4-5%, it looks very much like the current phase and it will likely continue to rise. If not controlled well, this CPI will continue to increase. That’s what happens when inflation rises, prices go up, and currency loses value. At that point,
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the Central Bank is forced to raise interest rates continuously to contain these escalating prices. Otherwise, it will cause instability. And what naturally happens to people's wages? If the consumer products I buy get more expensive, I have to demand a raise,
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and that’s when wages and input costs start to spiral. Those are the characteristics of this period of overheating growth, which is not good at all. Even though GDP is growing strongly and many think that's good, it is not as good as keeping GDP growth
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stable. And the third stage is the scenario where GDP slows down and interest rates are very high. The period of overheating GDP growth is like the economy being in summer; it is prone to overheating and could lead to
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a downturn if it grows too fast. As for the stage where GDP growth is stable, that is spring. This is summer. And the period when GDP slows down and interest rates are high is like autumn, so we need to be defensive. The sign of this
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GDP slowdown phase is that the GDP growth rate gradually decreases over the last 2 to 3 quarters. And this PMI index, if you search on Google, you will see it is below 50, and credit growth slows down. This means the rate
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of bank lending begins to slow down because interest rates have risen, so what happens then? Unemployment gradually increases and business sales, retail sales begin to weaken; you can search all these indicators on Google.
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And scenario number 4 is when GDP declines; this is the stage where policies may start to loosen and interest rates go down. This is the stage that I really like. It is the stage where late winter begins to
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transition to spring, and the bottom of the economic cycle often appears during this period. There is a high probability that it appears in this stage so that we have the opportunity to invest well. The sign of this winter
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phase is that GDP is negative or stagnant. Inflation, the CPI index, will cool down, interest rates start to decrease, and economic stimulus packages begin to appear. And credit begins to turn back toward positive territory. To put it simply, what does
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that mean? It means compared to before, banks start injecting new money to lend to people and businesses. See, credit turning positive means banks are pumping more loan money to the people and businesses. When credit is positive , it means more new loans are flowing
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into the economy, which is a sign that the government has opened the floodgates to help things recover. And one factor we can evaluate during this phase is the rise in long-term bond prices, which is also a leading indicator that the economy is shifting
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from winter to spring. Because this is the stage where the central bank might lower interest rates, so what is it that many people are thinking? That bank deposit interest rates will be lower in the future. So now, they want
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a safer place while waiting for spring to arrive, and they will rush to buy bonds. As more people buy bonds, the bond price will go up. Because everyone believes that what? Money will get cheaper, and they are looking for a
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safe haven to wait for the economy to warm up. That is when we need to consider if this is indeed the stage where the economy is transitioning from winter to spring. These are the signs for us to recognize which stage we are
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in, whether it is spring, summer, autumn, or winter, it all depends on these indicators. You can all search Google for these signs to get the data and develop your own perspective on the economy. I have just shared these
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indicators with you for this stage, and you can do the same for the others.
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Just search on Google and they will show up. That is a simple way for non-experts to go about it. So here, I can share with you an exercise, which is a two-minute exercise every quarter that anyone can do. Once every quarter,
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you should search Google for information on that quarter's GDP in our country, what the inflation was like that quarter, and what the interest rates were for that quarter.
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Then you should assess and draw an arrow for each of those indicators during that quarter. For example, in the second quarter, is the GDP increasing or decreasing? In the second quarter, is inflation increasing or decreasing? And in the second quarter,
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are interest rates increasing or decreasing? Then you compare it with the four scenarios above and choose which season of the economy this quarter is in. Which scenario is likely to occur, or we evaluate each indicator in this identification section so that
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we can correlate it to see which of these four scenarios it most resembles. So, those are the GDP scenarios within an economy. Of course, if we only look at this, it's quite one-sided. But I want to provide examples step-by-step
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so that you understand as you learn. Later, when we have learned enough about the factors and indicators of the economy, our assessments will be more effective and provide a more comprehensive view. Just remember that these are the four GDP scenarios. The
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first scenario is when GDP grows steadily with low and stable inflation, which represents a period where the economy is very healthy, people's incomes are rising, and spending is strong. The second case is when GDP grows too fast; this is a period where
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the economy is overheating and risks of a bubble may occur. The stage where GDP slows down and interest rates are high represents a period when the economy is very weak. For example, the period after Covid recently was a time when
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borrowing costs were high and demand decreased. And the fourth stage is when GDP declines and policies are loosened.
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And the fourth phase is the stage where GDP declines and policy is loosened. This can also be the stage where the economy transitions from winter to spring. This is a period of economic weakness that is beginning to be
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stimulated, and the cycle's trough may occur during this phase. So, how does understanding the economic phase and the current state of GDP affect our business, daily life, or investment process? The first strategy, regarding business strategy, is what it means
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when GDP grows at a certain rate? People in that economy have money, the nation has money, their income increases, so what do they start doing?
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Spending more aggressively. This is the stage where business owners can feel more confident about expanding their production and operations in a controlled manner. And what can we be ready to do? We can invest in more goods and stock up on more inventory.
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Because this is a period when people spend more and the market has higher demand, we can be more confident about holding a bit more inventory. In difficult economic periods, however, we should limit this type of inventory because it is very difficult to offload
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. And this is also a period where we can invest more heavily in marketing and upgrading our products and services . Because market acceptance during that period is more favorable, as increased income leads to higher demand and increased spending. This is the spring
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phase, so those in business can be a bit more confident about importing more goods, expanding stores, scaling up production facilities, and increasing advertising. However, if we are in a phase where the economy is overheating and the risk of a bubble could occur at
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any time, business owners need to limit their risks. We must keep tight control over costs and cut out any unnecessary expenses. Do not be too overconfident to expand your premises too quickly.
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Because if the economy collapses, what happens then? Business conditions will immediately turn gloomy. We should focus on products and services that fulfill essential needs, where demand is more stable, so that even if the market crashes, those products and
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services still maintain good demand. Those are the items we should focus on aggressively, and we must prepare contingency plans in case interest rates rise sharply. As for the third scenario, when GDP growth slows and interest rates are higher, that is a
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weak economic phase. In that case, naturally what happens? We need to shrink and cut back on inefficient activities within our chain and business model to reduce unnecessary costs and maintain positive cash flow.
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One of the goals during that phase is not to aim for rapid growth; instead, we just need to survive, get through that period with positive cash flow, focus on essential products, and renegotiate input prices with our suppliers. This means it is a phase
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where we must do everything possible to reduce the costs of the entire business . It is a phase where we need to survive, not a phase where we should be looking to grow. The transition from winter to spring is a phase where the
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economy is weak but starting to be stimulated. This is a phase where interest rates can be very favorable.
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So, businesses and entrepreneurs can take advantage of these low borrowing costs to begin what? Restructuring operations and investing in expansion, but it must be done with control.
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invest in machinery, invest in production facilities, and business infrastructure to expand when the economy starts showing signs of growth and demand begins to rise again. So these are the stages you will see, this is the phase where you need to go on
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the offensive. That’s when businesses need to be more confident and take on a bit more risk. Because at that time, everything is favorable, and the market is in a good position. But this is the phase where we see the market is still
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in an uptrend, but we cannot be too extravagant. And at that time, we must prepare for the situation where market risks, or economic risks, could arise at any moment. And the third stage is the stage where, naturally, we have
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already entered a downtrend, a decline in the economy, so obviously what happens? The goal is no longer to make a profit, but what is our objective? To survive through that period; we save on costs and focus on the essentials in
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the business so that we can make it through. And what is this final stage?
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It is the end of the downtrend, the final part of the downward trend. That is when we need to start getting ready, looking for the point when the economy begins to return to an uptrend and shows signs of recovery, then we start
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preparing for a new battle. This is the offensive stage. This is the stage where what? You both attack and defend.
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And this is the stage of pure defense. And this is the stage of defending while preparing to attack. So, you will see that these are the stages a business person needs to observe and recognize within the entire economy.
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Try to relate this to yourselves; have you or people around you ever been in a situation where the economy is very difficult, but they still feel the need to open grand, flashy facilities? They feel they must expand production and
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business just to project a very strong image. But that is a phase where if we go on the offensive when we should be playing defense, it becomes extremely risky. And many people are very skilled at their craft, very skilled at
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business, and very skilled at marketing , but they know nothing about finance. They cannot see which phase the economy is currently in. So naturally, what happens? Their business operations can face risks stemming from the macro environment. Those risks do not come
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from their actual business model. Even if that business model is very good, and their products and services are excellent, their inability to control costs relative to the economic phase means that when risks arise, they simply cannot overcome those general
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rules. In other words, they cannot overcome the trends of the entire economy. Because even if your products and services are great, they might not fit the market's needs at that specific time. Your solution might be very good, but if the market has no demand or
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lacks the purchasing power to spend on your products, then naturally, what happens? No matter how good the product is, you cannot succeed. Therefore, an understanding of macroeconomics is extremely important for those doing business. And if you ask me which phase
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our current economy is in, it is hovering ambiguously between phase one and phase two. This means we can see that the economy has been in a growth phase for quite a while now. It hasn't reached the point of overheating yet,
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but we still need to be prepared for that situation to occur. So our current economy, not just in Vietnam but globally, is lingering between scenario one and scenario two. This means in the current phase, we must start operating
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in a situation where what? We must both attack and defend; we cannot afford to go on the offensive completely. You must not be overconfident, and you still need to hedge against risks for your business model and your enterprise
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. That is the strategy for business owners. As for the strategy for investors, such as real estate investors during a favorable economic period, you should buy properties with real cash flow and good locations, and you can increase your investment share,
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increase your investment portfolio. In a period where the market is overheating, the economy is overheating , and prices are surging too high, you should limit the use of leverage and avoid investing in project-based real estate, or properties with high risks
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or poor locations. This is a period when we must both attack and defend, so we prioritize core properties with cash flow potential and high liquidity.
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Because, for example, if the economy is fluctuating too wildly and it suddenly crashes, what is our requirement then?
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It is no longer about making a profit, but rather about the ability to recoup your capital. Those are the properties that, at a minimum, must meet certain criteria. First, they must have good rental cash flow, and second, what else
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? They must be convertible into cash if necessary. If, during a period of overheating, you invest in project land or properties in remote areas, you will certainly be unable to sell them, which many call "dying on a pile of money."
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The third case is the period when the economy is in a downtrend. It is already in a downtrend. Everything is declining significantly. So, what is the strategy for real estate investors during that period? It is to hold cash.
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It is to hold cash. We shouldn't rush to buy yet, because during that phase, what is the natural outcome for real estate? Real estate will also decline along with the economy. We should not rush to buy during that stage. Holding
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cash during that stage is necessary to wait for better price zones. And if you do buy during that period, you must still prioritize real estate with high liquidity. These are properties with real demand located in core areas that
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can have high liquidity. Avoid risky projects. The fourth case is the end of the economic downtrend, which is when everything might be very cheap. Real estate investors in that stage need to find opportunities to accumulate quality properties to catch the
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recovery wave; that is the strategy for real estate investors. As for the stock market strategy, during a period when the economy is growing well, in an uptrend, and everything is clear, the priority is to invest in and buy into
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cyclical stock groups. What does the cyclical group mean? These are businesses and companies that follow the economic cycle. This cyclical group is one where, when the economy is good, the demand for their products and services is high, so those businesses
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will also grow along with the economy. But when the economy goes down, those businesses are also affected by that cycle. So, these cyclical groups, if they are in an uptrend phase, will grow extremely strongly. Cyclical stock groups include sectors such as
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materials, construction, finance, and discretionary consumer goods. You will see that when the economy develops, construction and materials markets will also heat up, right? Financial services will also become more abundant, and consumption will also grow better. So that is the stage when stock investors,
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during an "economic green" phase, should focus on those cyclical groups, which will be very good. So, let's keep it simple. Cyclical stocks are shares of companies whose business performance and stock prices tend to fluctuate significantly with the economic cycle.
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Therefore, when a cycle hits, those companies and those stocks will see very strong growth. And what is the main characteristic? They rise sharply when the economy grows and fall sharply when the economy enters a recession or slows down. See, and what is the reason
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for this? The revenue and profit of companies in this group depend heavily on consumer purchasing power and investment activities within the economy. And it also includes industries like automotive, right? When the economy is good, people buy more cars. But when the economy is bad, they
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delay their purchases. Luxury goods and high-end fashion, what are those? They depend on society's disposable income, or industries like tourism and aviation that grow strongly when the economy is good, right? Real estate also grows strongly when the economy is booming,
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leading to a high number of real estate transactions, which naturally pulls along what? Basic raw materials like steel and oil, as demand for construction booms during phases of economic development. And this group of cyclical stocks can also bring high
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profits if purchased at the right time according to the economic cycle. But naturally, what else? The risk is also high if you buy when the economy shows signs of a looming recession, so stock investors must understand macroeconomics. If we want to trade
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these cyclical stocks, we need to use indicators like GDP, PMI, interest rates, and inflation to determine the timing for entering and exiting this group. As for the second case, when the economy overheats and shows signs of danger, then obviously what? You must
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gradually reduce your position in these cyclical stocks. Because when the economy is down, these are the first to drop, and often they drop the hardest, so we have to shift from offense to defense. And when the economy truly
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enters a downturn, that is when we must reduce risk and prioritize the defensive group. The defensive stock group consists of stocks from companies that are less affected by the economic cycle. Meaning whether the economy is growing or in a recession, the demand
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for their products and services remains stable. Specifically, their revenue and profits fluctuate less with the economic situation; these are often industries providing necessities or essential services that people must use in any circumstance. For example, healthcare, electricity, and water,
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right? For these essential goods, naturally what happens? This defensive group, these stocks, will be less risky than the cyclical stock group. But naturally, what else? When the trend is growth, this group is also the one that grows more slowly and is less likely to
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explode in value. Everything has two sides to it. If you want high profits, naturally you prioritize that group, but the risk is also higher. If you want safety, you prioritize this group, but naturally, what happens? The profit you gain will also be less. Essential
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consumer goods include things like food , beverages, and hygiene products, right? Like Unilever or Vinamilk; these are essential products, or in healthcare and pharmaceuticals, such as medicine, hospitals, and medical equipment, for example, DHG Pharma. Yes , many healthcare sectors are essential
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, as are public utilities like electricity, water, and gas. Electricity, water, and gas are essential products, and another essential product outside this group is telecommunications, right? Internet and mobile services are definitely something indispensable in our modern era. Defensive stocks are the group of
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shares suitable for us to preserve capital and reduce portfolio volatility when the economy is unstable. They are often prioritized by investors during periods of recession or crisis. While the aforementioned group surely declines extremely sharply during those times, this group lags behind when the
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economy is growing. Isn't that interesting, guys? We study macroeconomics, but we also gain a lot of understanding about business and the stock market as well. If you find these things useful, please leave a comment to let me know. And we reach the final
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stage, which is when the economy transitions from winter to spring. That is the stage where the bottom of the economic cycle might be reached. This is the period when investors must gradually consider opportunities to shift their strategy from defensive to
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offensive. And that is when we look for sectors that benefit from the recovery, sectors that benefit from economic easing and interest rate cuts. That is when the economy recovers and begins construction, and financial resources start to be injected. So, those are
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industries like construction materials, real estate, and finance, where we begin to accept a bit more risk but within controlled levels; that is the knowledge about stocks. So we have gone through three groups. Strategies for business owners, strategies for real
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estate, and strategies for the stock market. And finally, I will share with you the strategy for gold. Regarding the gold strategy, during periods of economic development, naturally, money will be pumped outward to prioritize business and production. Money cannot
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just sit still in gold. Gold is a static asset. So, in a phase where the economy is growing well and is in an uptrend, what is the strategy for gold?
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Keep a moderate allocation. Because during that phase, it is difficult for gold to see strong growth. Because money is flowing elsewhere, you should only hold a moderate amount of gold for defense; there is no need to buy more.
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But when the economy begins to overheat , after everything has grown for a long time and starts overheating, we increase our gold holdings to hedge as risks rise. And in the third phase, which is when the market is in a
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downtrend, what happens then? Gold becomes a safe haven. As for the end of the downtrend, potentially transitioning into a new cycle, that is when we still hold gold but can gradually reduce or sell it to take profits and shift toward other uses. So
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this is a chart I have drawn up to summarize everything for you all in one place. And you must understand that our economy, every aspect of the economy in business and investment, revolves entirely around this chart. Regarding money or cash flow in the economy, you
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have to understand that for each phase, we must first determine which of these four phases the economy is likely in, so we know where the money is currently placed. So, at this stage, we know for sure that the economy is moving from
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phase one to phase two. Therefore, I see that we should have a strategy for business, a strategy for real estate, a strategy for stocks, and a strategy for gold to make them as suitable as possible. See, once you understand this
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, you have reached a completely different level in your perspective on the economy. Understanding this gives you a completely different perspective.
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So, if you find this chart helpful, please comment below to let me know. Thank you all very much. And at this point, our lesson has become quite long . We still have many things to discuss regarding GDP, as this aspect is quite
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broad. But don't think that the information and knowledge that An Dinh shared with you in today's lesson hasn't already given you very sharp, practical perspectives, and especially ones that are very easy for you to apply to your own view of the economy.
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So, as for the remaining aspects regarding GDP, I will gradually share them with you in upcoming videos.
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Otherwise, if I share too much at once, it will cause confusion and information overload for you. But before we wrap up today’s session, let’s treat this like a classroom—a place to share with you and interact with you. So,
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there are two small exercises I want to give you, which you can complete and then post in the comments section below this video. Exercise number one is for you to observe Vietnam's GDP in the current period. What is the requirement
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? Find the GDP figures for Vietnam over the last four quarters. You can look them up on Google using reputable sources. That's it. The second part is to write your assessment of whether Vietnam's GDP has increased or decreased over the past four quarters.
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And in your opinion, what is the main reason? You can research this on Google , look at articles, and find information. So, according to you, what is the primary reason for the increase or decrease in Vietnam's GDP over the
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last four quarters? Is the main cause coming from increased consumption, increased investment, increased public spending, or an increase in net exports ? That is a slightly more advanced exercise so that you can take the initiative in exploring those aspects.
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And when you've done that, please leave a comment below so we can discuss it together. Right, and let's leave the comments following this template below so I can keep track. And the second exercise that Anon wants you to do is
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one that doesn't require much reasoning , and we don't need to research like in the first exercise. This is a simpler exercise to help us identify the factors that impact GDP in the economy.
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That is to assume you are living in a small town and you write down three examples of final products. Which products are final products that are counted in GDP? Please write them down.
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And, for example, three examples of intermediate goods that are not counted in GDP. See if you can determine whether they are correct. Let’s see if you can correctly identify which products are final goods and services and which are intermediate goods that
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are not counted in GDP. So, please comment below so we can see if you have grasped the knowledge from today's exercise well or not. And thank you for joining me throughout today's video on GDP. We have understood together what
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GDP is. The calculation method as well as the extremely important table, the GDP strategy table. I call this our GDP strategy table for today. Because when you understand this table, you will understand how money is circulating through the economy and where it is
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currently stopping, so we can have appropriate business and investment strategies. And I believe this table will help many of us have a different perspective on the economy to apply to our business and investment processes so we can understand this economy. But
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this is only a part of the macro picture of the economy. And in the next video, Anon will share with you a leading indicator for GDP. It's like an early-warning radar. It can tell you if the economy is about to heat up or cool
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down a few months in advance. And if GDP is the thermometer measuring the current temperature, then the indicator we are about to learn will let us know the upcoming weather so we can prepare in time, make decisions in our business
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and investment processes, and attack or defend earlier than others. And when you understand and can use economic indicators, you will see that you have a time advantage over other investors and business people. And remember to look forward to Allen's videos so we
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can gain the keys to help you better understand our economy and society. I will see you in the next video in this macroeconomics course series, which airs at 8:00 PM every Wednesday and Sunday. Don't forget to tune in for the
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next video. Thank you all very much. M.
Topics:GDPmacroeconomicseconomic growthinvestment strategyinflation rateinterest ratereal estate investingstock marketgold investmenteconomic cycle
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