13/10/2023 – 14:38
To volarize or not to dollarize? This is the question that has raised doubts in many investors in Brazilespecially among those most agitated by the explosive combination of high interest rates, volatile exchange rates and two simultaneous wars, in Ukraine and Israel, with devastating potential for the world economy. Although the American currency closed sharply on Tuesday (10), at R$5.05, it has tested the nerves of those who follow the market every day. In 2023, with traces of an electrocardiogram, the greenback has already dropped to R$4.73 (lowest price of the year, on July 24th) and has already reached R$5.29 (highest price, on March 24th). It should close the year at around R$5.00 — according to the most recent projections from the Focus Report, from the Central Bank. Everything, of course, if the ongoing conflicts do not take on global proportions.
Whether in times of peace or at the height of war, dPolarizing part of investments is an important strategy for those who want to protect their assets from regional and seasonal, economic or political volatility.according to the international investment specialist Douglas Niemeyer.
Trader, investor, course mentor Freedom in Dollars and creator of Manche Method of InvestmentsNiemeyer states that the American currency remains as main store of value in the world today, not only for individual investors, but also as a safe haven for companies.
“No matter what resource is available to invest, the dollar is the best option for those looking for stability and a solid alternative to shield their assets.”
Douglas Niemeyer, international investment specialist
Currency is a financial commodity. And in times of turbulence the dollar is the most sought after commodity. Hence the image of a safe haven.
A trend, according to him, is that the real will depreciate in the coming months because the Brazilian economy is weaker than the American one. That’s why, The longer you wait, the harder it will be to start.
“We have no way of knowing what levels the currency will reach in six months or a year. What is predictable is that the real will lose value against the dollar. Therefore, the suggestion is that investors dollarize their assets in a phased manner, gradually, sending a little money out every two or three months”said Niemeyer.
“The dollar doesn’t fall forever and it doesn’t rise forever. So, the smart thing is to keep an eye on the price and buy whenever there is a drop,” he said. For him, the dollar will fluctuate between R$5.25 and R$5.50 at the end of this year, above the R$5.00 forecast in Focus.
Economist and investment analyst at BTG Pactual, Arthur Mota agree that dollarizing part of investments makes perfect sense. He states that international allocation forms part of the process of diversification and increased investment efficiency, not only sectorally but also geographically.
“When you invest abroad, you dilute some discussions typical of emerging markets, such as tax issues,” said Mota.
For him, it is necessary to create a routine and a philosophy of dollarizing reserves so that, within as long as possible, neutralize inevitable economic fluctuations over the years. “Fixed income in the largest economy in the world is very attractive today. So, this attractive yield in dollars is very interesting for Brazilian investors”he said.
“When you invest abroad it dilutes some discussions typical of emerging markets, such as tax issues.”
Arthur Mota, from BTG Pactual
Financial health
Are there risks? Of course, there are always risks. Sending dollars abroad needs to take into account the financial health of the receiving institutions. American brokers and banks also fail. But a good selection of the destination of assets can reduce the risks of these institutions to almost zero.
Niemeyer recommends that investors who are just starting out buy shares linked to the index S&P500, of the 500 largest American companies. “They tend to appreciate between 7% and 9% per year, already discounting inflation,” he said. “This is already very interesting for those who want to diversify. Even if a company goes bankrupt, the basket of companies will compensate for that loss. Being positioned and diversified is what guarantees security.”
The search for dollar allocation and international diversification of investments is essential to broaden the horizons of the country of origin of the resourcesin the view of Larissa Friasfinancial planner at C6 Bank.
“Brazil is a developing country and has its limitations when compared to a global scale,” he said. “It represents only 3% of global GDP. There is a sea of investments out there.”
Therefore, according to Larissa, having an anchor in the most traded currency in the world is a good justification for sending resources abroad. How the billionaire advises Warren Buffett, “never bet against America” (never bet against the United States, in free translation). A good tip from those who made a fortune betting in favor — and in dollars.
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