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How about taking extra time to carefully analyze long-term strategies, whose returns far exceed what rentiers aspire to? After all, it may be worth investing in this more advantageous approach.
The risky asset sector will be impacted when the rate Selic cause discomfort in the conservative investment community, and this will result in a change in attitude (once again). The cycle repeats itself.
Regrettably, many individuals will accomplish exactly what I mentioned earlier. They will be left behind, seeking this rehabilitation of rentierism.
What I question most is: a well-executed financial investment strategy, with an appropriate distribution of resources and with the investor understanding market fluctuations, in the long term, could not generate more than this “1% per month"? Is this the best we can aim for?
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Impact of profitability our investments
What I mean is: as long as there is something around 1% per month, even gross, in simpler fixed income assets, such as banking and Treasury Selic, flow to other markets will be limited. There may be some movement, but it will be discreet compared to the withdrawals, there is no doubt about that.
Local investors will only take action when their portfolios begin to show a decline in this rate of return. This could happen soon, as inflation is declining rapidly and there will soon be a new team at the Central Bank that seems more inclined to adopt a more flexible, i.e. more “dovish” monetary policy.
However, this pendulum? Sorry, it does not operate properly.
You are likely to dispose of your assets risk when they are most devalued and buy them back when they are most expensive. Furthermore, it is important to consider that fixed income is also subject to price variations and, in search of interest earnings, you can sometimes neglect this aspect and not take into account, for example, the level of credit spread before Choose the title you want.
It is essential to be aware of all financial aspects when making investment decisions to avoid unnecessary losses.
It was evident that in the event of an initial opportunity there would be a reversal. I was too naive to think that at some point this wouldn't happen. I am not claiming that, with higher interest rates, investments fixed income options have not become more attractive.
Public bonds that offer 5% more than inflation for the period (IPCA), exempt assets that can practically fully refund the generous amount interest rate that we see on the screen. Yes, they have become more interesting and perhaps deserve a larger share of your portfolio. investments.
I remember the period when I worked as an advisor and interest rates were around 7% per year. Most of the clients I served, when asked about their goals, always responded: “I want 1% per month, without risk, guaranteed.” It seems like we're all addicted to this monthly return at this level.
It seems that we were deprived of this “numbing” with the lower interest rates. Without much preparation and guidance, we were thrown into more complex products and the need to accept greater fluctuation to seek greater gains.
Transformations in the Market Investments in Brazil
During this short period, a large number of Brazilian citizens entered the stock market and looked for brokers in order to diversify their portfolios. investments. Big banks suffered significant losses in custody, while digital platforms gained more traction.
In the last two years, there has been a setback marked by record issuances of LCIs and LCAs, as well as billion-dollar redemptions in the investment fund industry, mainly in multimarket and equity strategies. There was the disappearance of market managers, consolidations occurred and a large part of Brazilians went back to “hiding” behind rent-seeking.
**The mass entry of Brazilians into Stock exchange and changes in financial market brought challenges and opportunities to investors from all social classes.**
The coronavirus health crisis and the need for stimulus have had a significant impact on financial markets and interest rates. Brazil experienced the lowest interest rate of its history, but this scenario was short-lived.
The rapid economic slowdown due to lockdowns has resulted in significant inflation and interest rate increases across the world, including in developed economies like the United States. The bullish period in the stock market was transitory. **This movement was reversed into an important inflationary process and increases in economic base rates around the world, including developed economies such as the USA.**
Renting can be considered a sign of financial freedom and opportunity for growth. The traditional investment options offered by banks, often accepted without question, end up dominating family finances.
Do you identify with the information above? Don't worry, this is part of the culture we live in.
As of October 2016, there has been a significant change. An important reform process resulted in a reduction in interest rates, providing a more favorable environment for consumers.
Dear readers,
Brazil is used to dealing with higher interest rates. Generations have grown up in an environment where the rate Selic reached double digits, periods of hyperinflation, currency changes and significant fluctuations in monetary policy left deep marks.
The most popular investment options include savings and real estate. The investment culture we inherited is characterized by a simplistic and ineffective vision.
Source: InfoMoney
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