Opinion – Grain in Grain: We are once again a rentier’s paradise; know how to enjoy

Paulo Guedes’ wish was not granted. The savers’ prayers were stronger and Brazil was once again a paradise for rentiers. After four years with the Selic rate below 10% per year, in 2022 it is expected that applications that remunerate the basic rate of the economy will appreciate close to 12%.

This return is higher than the average Selic return in the ten years prior to 2017, when it was above 10% per year most of the time.

In the last four years, whenever I talked to someone I knew, everyone complained that they hadn’t taken advantage of the “good” season of high interest rates to save.

The “good” time of high interest rates is back.

This is no cause for celebration. However, if you regretted not taking advantage of it in the past, now is the time to increase your savings level.

The chart below shows the evolution of the Selic Target rate defined by the Monetary Policy Committee (Copom) in the last 15 years.

Today, the Selic rate is at 9.25% per year, but the market expects it to approach 13% per year by mid-year.

The table above presents the market’s expectations for the next COPOM movements implicit in the yield curve negotiated in the market.

The first column shows the dates of upcoming committee meetings. The second column shows the movements expected by the market. Finally, the third column presents the resulting CDI rate, considering that the COPOM decision is as expected by the market.

So, don’t procrastinate the start of your investments.

Review your budget and raise the savings level to make the most of this moment or you will regret it again in the future.

Michael Viriato is an investment advisor and founding partner of Investor’s House

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