Investor should not be held hostage by Brazil’s lack of prospects – 04/08/2021 – Marcos de Vasconcellos

The main indicator of the world stock market reached its historical record. It is very likely, however, that the return on your investments has not gone so well.

The S&P 500, which brings together the 500 papers considered most representative of the New York Stock Exchange (NYSE) and Nasdaq, hit 4,092 points this Thursday (8). Almost 9% above the 3,756 it reached at the end of 2020.

Here, “our” Ibovespa is 5.5% below the historical record (the 125,000 points it reached in January this year).

The index, which is the main indicator of the Brazilian stock market, tends to be more volatile than the S&P 500 and, in the last 5 years, has risen 135%, while its American pair has been at the 100% beam.

When we consider this year alone, however, the story is different: while the Brazilian market had a slight negative variation (0.15%), the American rose more than 10%.

What do you see there that you don’t see here? Vaccines, money on the table and clear direction of a government. A newly elected government, by the way, but which made a point of pointing out the guidelines for fighting the pandemic in its first days of office.

Even the possibility of increasing the tax burden to fill public coffers has been welcomed by the US market. Treasury Secretary Janet Yellen published an article in the Wall Street Journal last Wednesday (7), calling for a tax increase to fund a $ 2.25 trillion infrastructure investment program.

Without juggling, Yellen points out: the current American tax rules mean that companies have more benefits when migrating their operations to other countries. The American market remained unmoved by the statements.

In choosing to be competitive in terms of taxes, the United States has put aside the development of labor and infrastructure, says Yellen.

It is a direct statement, without the tortuous speeches that are usual here when someone pulls out of the hat a new proposal for “tax reform”. Pragmatism is good for the accounts.

Regarding vaccines, you may have seen, New York City started vaccinating people between 16 and 29 years old. In São Paulo, the targets of the needles are still in old age (68 years). Where does the prospect of improving the economy seem most palpable?

But it is not because they are in Brazil that their investments need to be restricted to the national market. One of the solutions pointed out by specialists is to link part of their investments to the dollar. According to BTG Pactual, in fact, the currency may reach R $ 6.40 by the end of the year.

One option is to buy papers from major exporters, such as animal protein producers, such as JBS and Minerva Foods, which have been well recommended by banks and analysis houses, for surfing the economic recovery in China and the USA.

Another option, which is now entering the radar of investors, is to invest in ETF BDRs. The alphabet soup does not help, but they are papers issued in Brazil backed by foreign funds, linked to indexes, that is, that replicate the indexes’ portfolios.

ETF shares are traded as shares in their markets and BDRs “import” their variations, and can be traded on the stock exchange, like any stock.

And this year alone, 25 new ETF BDRs have become available to all investors. Before, they were only for qualified investors (with more than R $ 1 million invested in the financial market).

The menu ranges from BACW39, which replicates an index that brings together papers from medium and large-cap companies from developed and developing countries, to BIBB39, which brings together pharmaceuticals and biotechnology companies listed on Nasdaq, including indexes by Chinese companies ( BCHI39) and Japanese (BEWJ39) and even following the value of gold (BIAU39).

It is a long menu for investors to search for subjects and themes with which they are more familiar and find new niches and markets to invest.

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