High interest rates and the value investor
Deposit rates just passed 10%. Mortgages are up to 14%.
And here is the strange part: I am not worried.
What the market is revealing
Rising rates do not create problems. They expose problems that were already there.
Anyone borrowing to buy stocks on the expectation that prices rise faster than the interest is now recalculating. Anyone holding property at 70–80% leverage, expecting easy liquidity, is now recalculating. Anyone who bought out of fear of missing out rather than an understanding of value is now recalculating.
Interest rates do not destroy assets. They reprice risk, which the market had been mispricing through years of cheap money.
I sat still through the most recent sharp correction. Not because I am braver than anyone else, but because no loan of mine was racing against the rate.
Leverage and the illusion of speed
There is a very common line of thinking among Vietnamese investors: use leverage to "optimise capital".
It sounds reasonable. Borrow at 10% a year, invest expecting 20% a year, and the 10% spread is "free" profit. The arithmetic is correct. But it is only correct if the 20% is certain and the asset does not fall in value while the loan is running.
When the borrowing rate hits 14%, the same arithmetic requires a reliable 25–30% a year before it is still "optimal". No asset class in Vietnam today offers that with anything like the certainty needed to borrow against it.
Buffett never used personal leverage to buy stocks, even though he could borrow more cheaply than almost anyone. Not because he cannot do arithmetic, but because he knows the market can stay irrational longer than your account can stay solvent.
Leverage does not shorten the road to wealth. It shortens the time you are allowed to sit still.
Deposit rates above 10%: what is that actually telling us?
Deposit rates above 10% mean the banking system genuinely needs money.
In that environment cash becomes genuinely valuable. Not because holding cash is an investment strategy, but because the person holding cash is the only one with a choice when assets start selling at more reasonable prices.
I sold a property investment in early 2023, not because I saw a top, but because the valuation no longer left enough margin of safety. That money sat still for nearly a year. Several people asked why I didn't reinvest immediately.
The answer was simple: nothing was cheap enough to be worth giving up the option.
Deposit rates at 10% now mean that cash is being paid an extra 10% a year while I wait. Not bad for "doing nothing".
What I chose to do differently, and what happened
About three years ago I stopped borrowing to invest entirely, at a time when rates were still low and plenty of people around me were using margin to go faster.
That decision cost me part of the 2021 run. I know that.
But it also meant that when the market corrected hard in 2022 and rates began climbing, I was not forced to sell anything. No margin calls. No liquidity pressure. No sleepless nights working out how much next month's interest would eat into the position.
I chose sleeping well over speed. And sleeping well turns out to be an investing advantage too, because it keeps emotion out of the decisions. This is precisely the psychological mistake most investors make under financial pressure.
What does this market need from you?
Nothing special.
If you have no leverage, this is a good time to reassess the portfolio with a clear head and no pressure.
If you do have leverage, this is the time to be honest with yourself about its real cost, not the cost you were hoping for.
If you are holding cash, this is not the time to hurry. High rates put pressure on assets. That pressure takes time to show up in prices. Patience now is not passivity; it is strategy.
A high-rate market does not destroy opportunities. It pushes them toward the people who do not need to rush.
Silent discipline. Compound value.