Rising inflation, financial problems with no solution in the short term and, soon, elections. This is the perfect storm surrounding Brazil, but it is causing nightmares especially for those holding investments in the country. The proximity of the elections will cause some nervousness and create a sense of opportunity for others, but the practical implications appear to be greater and in the year 2022.With the Selic rising more than 6% and expected to rise soon, many are skeptical about which companies will be the best investments. Even experts from YouTube and Instagram avoid giving too much of an opinion on the subject, mainly because the increase in the so-called “Brazil Risk” is very large.
Why does the election weigh on investment? Whenever there is potential for change in the political environment, it is inevitable that any volatile investment will have better or worse results than the average investment. In the next elections, however, we will have a much more unpleasant situation.
The opposition to current President Bolsonaro going forward is that his opponent, Lula, despite having a good chance of winning, is also unpopular among a large segment of the population. Furthermore, there are many groups on both sides who are willing to disagree with an outcome that is not aligned with their interests, creating even more political tension.
Everything that happens in a country affects the value of investments, and this high risk makes investors cautious in their decisions. However, this does not mean that there are no good investment opportunities.
What are the best investments right now? There is a view among some investors that fixed income will become a better choice in these challenging times. It is true that Selic has projections of up to 8.5% by the end of 2022, but we have to keep in mind that inflation is already projected to reach 8.35% by the end of 2021, that is, a real gain zero or even bad things.
Don't be fooled. Although there is no volatility in fixed income at a fixed time, it is variable income that contains the best investment opportunities, even in the world in this chaos. To get a general idea, we can talk about:
Stocks – by investing in companies in sustainable sectors, investors know that once the storm passes, no matter how long, the money they will make. FIIs – real estate investments tend to depreciate as the Selic rate rises, proving to be a good investment in the long term. Options – Options allow people to seriously learn this type of investing to make money even when the market is falling. US ETFs – While Brazilian ETFs are rare and do not distribute dividends, those issued in the US guarantee income and have almost unlimited options. .
The best short and long-term investments for 2021 If you are thinking about the short term, there is no other way than to continue guaranteeing income. It is possible that the best short-term investment is in options, but it must be invested with wisdom and knowledge. As mentioned earlier, they allow you to earn ice money through successful progress.
In the long term, a balanced portfolio provides a clear conscience, as long as high-risk assets are kept to a minimum. For example, the combination of stocks and FIIs has led to better diversification in Brazil. By adding ETFs, a part of your portfolio will no longer suffer from the long-awaited crisis in Brazil.
The road to 2022 and beyond Brazil and its economies have already seen all kinds of sudden impacts due to uncertainty in the country. Even children have had a unique experience with the series of changes caused by the pandemic. Therefore, the best way is to have a solid long-term portfolio and, after gaining experience for this, practice short-term trading.