Investing in Brazil
Investing in Brazil
Today much is said today about the brazilian stock market. Profits here, losses there, up and down daily stock flutuations and various other things that an average citizen could never understand. And that's exactly why a large portion of society is still afraid to invest in stocks, specialy in a foreign country.
But in this article I'm not saying that the brazilian stock exchange is the best place to invest in Brazil because the country has a great potential for the future or because you can make lots of money with stocks. Nope, I'm here just to give you some alternatives of investments to those that resist the idea of investing directly in shares of foreign companies.
They are:
Brazilian Savings Account
The truth is that savings accounts are a poor investment, even in Brazil. You almost never get anything more than inflation, so if you are brazilian, it's a waste of time. But still, you can make over 6% a year. Ok ok, that's nothing but at least it's a very, very safe "investment". Way better than regular savings accounts, for sure.
Plus, if you have little money or do not know how to invest in the stock market, you can save your money while you learn to invest. In this case, the savings account would not be an investment but rather a place where you protect your money from inflation while looking for better alternatives of investments. That goes for american savings account too.
Brazilian Bonds
Most brazilian bonds make you around 10%-15% without doing nothing. And I'm talking about treasury bonds. They tend to be relatively safe and although they don't yield more than stocks of good companies with excellent fundamentals, certainly yield much more than savings accounts.
There are several types of good treasury bonds. These are extremely safe (you lose your money only if Brazil goes bankrupt) and also, there are varied choices of bonds. You can choose one that keeps pace with inflation, one that pays you coupons (like dividends for bonds), other that pays you all at once and so on.
You can also use bonds to save money, much like savings account, but way better since it yields more. The negative point is liquidity, which is usually much smaller. But in most cases it doesn't make much of a difference, unless you're in a hurry to get some money or something.
ETF's
You can also invest in ETF's, exchange traded funds.
Those in Brazil are great, low administrative fees, decent liquidity and spectacular performance over the years. Unfortunatelly you don't have many choices, there are only a few funds: PIBB11, BOVA11, SMAL11 and so on.
If you don't know how to invest in the stock market, those ETF's can help you a great deal. You can leave your money there and that's it. I like this option but must warn that there are risks, so be careful with what your doing!
Good luck in your investments!
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