July 20, 2024

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Rising Interest Rates and Falling Stock Market: What Investment Opportunities Have Appeared After Recent Market Adjustments?

Rising Interest Rates and Falling Stock Market: What Investment Opportunities Have Appeared After Recent Market Adjustments?

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São Paulo – If fixed income until the beginning of the year gave space to risky assets, due to the low interest rates that prevailed at the time, today, with Selic returning to 6.25% per annum and the possibility of new hikes in the base interest rate in the coming months, the scenario is different .

This is because a more volatile environment – due to uncertainty about global economic growth, inflationary pressure, and political and financial risks in Brazil – has led wealth managers to reduce their stake in the stock exchange, given the opportunities in fixed income.

“The political side, inflation and interest rate hikes are a game Brazilians know how to play. So, in the end, investors are compensated for taking less risk,” says Armando Maracini, CEO and Partner at More Invest.

He says that investments in the stock market are declining, moving from 15% to almost 10% of the portfolio, as well as the share allocated to multi-market funds, from 25% to 20%.

Instead, Marracini added structured credits, redeemable after 30 or 60 days, at which a return equal to the CDI rate (the main reference for fixed income profitability) plus 4% or 5% per annum – which is considered attractive. The idea, he says, is to go through a turbulent period, navigate high interest rates and receive a premium above the Selic rate.

Delayed certificates of real estate and agribusiness receivables (CRIs and CRAs) and letters of credit for real estate and agribusinesses (LCIs and LCAs), which offer bonuses of over 130% of CDI and have maturities of up to three years, are also interesting, according to Ricardo Felice. , CFP Certified Financial Planner and Director of Portogallo Investimentos.

The same goes for CDI-linked infrastructure bonds, with a yield of over 130% of CDI, he assessed. In this case, the terms are usually longer – at least five years.

As with More Invest, Portogallo reduced its allocation to the exchange, given the more difficult scenario. For Phyllis, a higher interest rate scenario is more suitable to invest in fixed income, since a good redemption point for risky assets would be with Ibovespa trading between 109k and 110k pips. Today, the main index of the Brazilian Stock Exchange is around 113,000 points.

With high interest rates and inflation, and the Brazilian stock market falling, what to do with investments? NS Infomoney Speak with two wealth managers and an investment advisor to understand the opportunities that have arisen from market adjustments. Check out the main suggestions below:


Certificate of Deposit Banks (CDBs), which are traditional fixed income investments, have offered attractive rates on the platforms of financial institutions in light of the increase in the silica rate.

Pre-fixed papers with three- to five-year maturities, which pay annual rates of 12%, offer good opportunities, in the assessment of Mity Train, Monte Bravo’s head of products – especially for investors with a financial buffer and a long-term focus. There are also three-year CDBs that pay rates of 6% per annum as well as the variation in inflation as measured by the IPCA.

Draws attention to medium-sized banks, which offer more attractive rates and which can be an alternative, given the coverage Credit Guarantee Fund (FGC), a type of insurance of up to R$250,000 per CPF in case the financial institution gets into trouble (eg central bank intervention).

“Customers have been wondering if prices won’t open [subir] bone. In an election year we may have moments of stress, but assets that pay the IPCA plus 5.5% or 6% annually are very attractive to carry in your portfolio, he says.

IPCA + Treasury or Selic Treasury

The current scenario also contributes to opportunities in government bonds. This is the case for those associated with inflation as measured by the broad national consumer price index (IPCA).

According to Marcini of More Invest, the medium-dated IPCA+ Treasuries to 2035 — which currently pay investors at 4.8% per annum plus an IPCA differential — are interesting for three reasons: higher interest rates, inflation protections and higher liquidity.

He says he started recommending papers with a minimum average (Duration) lower, due to the more volatile scenario, which lowers prices for longer bonds into the hands of investors. Instead of maturities in 2050, now look at maturities that extend through 2028.

in a AugustThe value of government bonds fell by as much as 9.5% amid mounting financial concerns. Such was the case for IPCA + Treasury with a maturity of 2045, whose price is down 9.45%. The real interest paid on the paper rose from 3.40% at the end of July to 3.72% at the end of August.

IPCA + Treasury due in 2035 is also among Monte Bravo’s Maitê favorites. On this Monday (27), the newspaper pushed inflation plus a rate of 4.85% annually. “Today we see excellent opportunities both in government bonds and in the private credit offering – a good time for those with space in the portfolio,” he says.

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Phyllis, of Portogallo Investimentos, says he likes the Selic Treasury, a fixed postcard, whose bonus tracks changes in the Selic rate. When the benchmark interest rate rises, the bond’s yield increases automatically.

In the latest report to focus, published by the central bank, the financial market expects a new increase of one percentage point in Selic at the next meeting of the Monetary Policy Committee (Copom), in October, with the benchmark interest rate for the year ending at 8.25%. “It’s interesting, if the investor needs resources, even reinvestment. If you hold the paper for a year, you can get opportunities in the stock market, take a moment when the markets are rising and be able to buy little by little,” says Phyllis.

chip and international exchange

Another way to allocate a wallet at a time of heightened uncertainty, according to experts consulted Infomoney, through international diversification.

Maitê, of Monte Bravo, and Veles, of Portogallo Investimentos, cite the exhibition via index funds (ETFs), which allow individual investors to invest in global markets with small amounts, in the range of R$100.

Marracini, of More Invest, proposes ETFs that replicate stock indices in Europe, a continent that “is able to better capture the post-pandemic world, with a real economy, with more companies in industries, cars, production and less technology.”

To invest in the Brazilian Stock Exchange, the CEO recommends investing in the stocks of fund managers known as “Stock Collectors”, to choose roles by hand. He asserts that there are higher chances of finding “low priced, but good quality companies, which must go through this period of greater financial risk in a sustainable way.”

In addition to “long-only” stock funds — where a manager buys only company shares, always betting that they will appreciate over time — Maracini says that “long-biased” strategies can also book opportunities. This type of fund starts with a “buy bias”, with the expectation of an increase in the stock exchange, but can also carry some bets on falling stocks or short positions. The strategy is considered more defensive, given the volatile scenario of variable income.

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