'the investor needs to use the rules of the game to his advantage'

This Thursday (19), the markets reacted to the decisions of the Copom (Monetary Policy Committee) of the Banco Centralwhich raised the Selic to 10,75% a.aand of the Fedthe US Federal Reserve, which cut interest rates in 0,50 p.p for the first time in over 4 years.

Both movements met market expectations, as they were already expected to monetary tightening in Brazil and a loosening in the United States.

And with that, the question investors are asking themselves right now is: Where to invest in the face of changes?

After all, although expected, the movements made on the same day by central banks and in opposite directions left many doubts for investors regarding what to do with their portfolios.

Therefore, in order to help investors, the Market Roundupdaily news program of Money Timesorganized a andspecial about Super Wednesday (as the day on which the Brazilian and US central banks decide on interest rates is known).

Among the programming, on Thursday the journalist and presenter Paula Comassetto it received Vinicius Fernandesmanaging partner at Jobin Investimentos, to provide recommendations on what direction investors can take with their portfolios from now on.

Below, you can check out the best moments of this conversation and how to access it. free dossier that Money Times is making available with everything you need to know after the interest rate decisions.

How to invest after interest rate decisions in Brazil and the US

While the interest rate cut in the US has led to an increase in risk appetite for investors abroad, in Brazil, the scenario of high interest rates for a longer period has reduced the attractiveness of variable income assets, according to Fernandes.

“The international scenario is one of the best possible for an increase in risk appetite. Current indicators do not show a recession and Powell stressed that he cannot see a recession in the US,” he explained.

Therefore, Fernandes' main recommendation is always have some money outside Brazil: “Wednesday was proof of the benefit of having national and international assets in the portfolio. The markets abroad reacted very well to the Fed, but not here.”

After the interest rate decision in the US, while stock markets around the world reacted positively, the Ibovespa (the main index of the Brazilian stock exchange) ended the session down -0.22% awaiting the Copom and, on Thursday, lost the 134 thousand point level.

In this sense, Fernandes says that, given the interest rate scenario in Brazil and the US, he likes to think of a portfolio that has more risk on the international side and less risk on the national side. “The investor needs to use the rules of the game to his advantage”, he says.

In the international portfolio, he mainly recommends technology actions: “there is a huge shortage of this sector here. We have Petrobras, Vale, Bradesco e Bank of Brazil as the biggest stocks in the last 20 years. So, the investor who was restricted to Brazil did not participate in the technology boom”.

Furthermore, he believes that, as a good practice, the investor should have something between 15% to 20% of the portfolio in international assets.

In Brazil, Fernandes says that fixed income is very difficult to beat, especially at the current interest rate level. “It is very rare to see asset classes earning an IPCA +6%. Today, you can easily achieve this with government bonds,” he says.

Furthermore, he highlights that Brazil has “two very favorable rules of the game to invest in fixed income for individuals”. They are:

1. Credit Guarantee Fund (FGC): according to him, the bonds that are guaranteed by the FGC are very attractive and offer higher remuneration with lower risk.

2. Assets exempt from Income Tax: “mainly the incentivized debentures that are IPCA+ and can pay good real interest rates”, he points out.

That said, Fernandes points out that he would benefit from the IR exemption to invest in IPCA+ and, with the FGCwould take advantage of the pre and post-fixed securities.

However, the economist emphasizes that this does not mean stopping investing in shares on the Brazilian stock exchange. “There are still companies in Brazil that are very cheap and which have a good chance of appreciation,” he said.

Therefore, he says that “under no circumstances would I say that there should not be presence of variable income in the portfolio. I just think that, in the current scenario, those who like to have 25% of their assets in the stock market, might end up having 20%.

Free dossier: see more recommendations on where to invest after Super Wednesday

You have just seen the best moments of the interview that took place between Paula Comassetto and Vinicius Fernandes, managing partner of Jobin Investimentos. But this is just one of the materials that the Money Times prepared for readers after Super Wednesday.

The news portal has prepared a free dossier with analyses and guidance on where to invest after the interest rate decisions in Brazil and the US. There, you will find:

• One detailed analysis by Marcio HollandPhD in economics and professor at FGV (Fundação Getúlio Vargas) on data from Copom and Fomc;
• A Full interview by Paula Comassetto and Vinicius Fernandes, managing partner at Jobin Investimentos, with recommendations on where to invest after Super Wednesday;
• One first hand coverage the release of the Copom minutes, which generally give a “hint” about the next interest rate decision in Brazil.

To receive the complete and free dossierall you need to do is register for free at the link below. This is an initiative of Money Times to help investors make the best decisions for their assets.

Therefore, I suggest you register and ensure your access to all content. You don't pay anything to register, but you can profit a lot from all the information you will find: