I have been working in the financial market for almost 25 years. In the last quarter of a century, if you follow the market too, you probably had moments when you looked back and thought: “oh if I had enjoyed that period”. I believe that two years from now we will think the same thing about the current moment.
As in this present moment, in all these past periods, the risk in the respective moment always seemed greater. This risk makes investors withdraw, but it is exactly the opposite that they should do.
The moment is interesting for all investors, but especially for conservative investors.
The Selic rate is at the highest level in the last 15 years. The chart below shows the evolution of the Selic rate.
Currently, it is possible to invest in private securities such as CDBs with a yield of 120% of the CDI. This results in an expected return of over 16% per year. With this rate of return, R$ 50 thousand today is equivalent to R$ 1 million in 20 years.
The rates referenced to the IPCA are also close to their historical highs. The chart below shows that in the last ten years, there have been few moments when the rate has surpassed the current level.
This means that you may even be able to invest in higher real rates, but you will hardly regret investing in IPCA+6% per year.
Again, CDBs pay a premium over the government bond rate. Therefore, they are almost irrefutable if the investment within the guarantee of the Credit Guarantee Fund (FGC) is considered.
These rates are unlikely to stay at this level for long. Therefore, you must do what is necessary to enjoy it. That means saving money and putting off short-term pleasures.
I guarantee that this sacrifice will be rewarded.
The aggressive investor is not helpless either. The price/earnings multiple of our stock exchange is at one of the lowest levels in history.
Also the dividend yield of the shares, known by the name in English Dividend Yield is at historic highs. This means that prices are low relative to the distributed dividend. The chart above shows the evolution of this indicator.
All these indicators point out that it doesn’t matter if you have a conservative or aggressive profile, the time is ideal to invest.
Michael Viriato is an investment advisor and founding partner of Investor’s House
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