As the end of the year approaches, it is customary for individuals and businesses to take stock of their investments and envision the strategy to follow for the next 12 months. However, the new year brings with it a series of uncertainties that complicate any decision-making or investment planning. The “perfect storm”, as they call it, which combines geopolitical factors, such as the war in Ukraine, with galloping inflation and an energy crisis that mainly affects Europe, creates great instability in the markets and inhibits a certain investment impulse. On the other hand, uncertainty about the future motivates the reinforcement of savings and both individuals and companies look for the most profitable options. Dinheiro Vivo spoke to some specialists and financial analysts who left their recommendations.
High savings certificates
If we had to choose a winning product among the various investment options, savings bonds would certainly be one of the candidates. Being a guaranteed capital product, it is an option from the outset that attracts the most prudent investors, with the added benefit of benefiting from rising interest rates. “In this month of December, the gross interest rate for new subscriptions and capitalizations of Savings Certificates was set at 2.842%, which translates into a net remuneration of more than 2% (the retention rate of 28% is maintained),” explains Rui Bairrada. The CEO of the credit intermediation company Doutor Financeira also mentions that as reference rates in the Eurozone will continue to rise next year, Euribor rates will follow this evolution, which will further increase the attractiveness of this savings product. In addition to much higher interest rates than other products with a capital guarantee, with Savings Certificates you can enjoy the capitalization of the interest: the certificate holders receive interest every quarter, which is added to the initial capital and thus generate even more interest. From the second year onwards, you benefit from a retention premium of 0.5% on top of the base interest. From the 5th year, the retention premium increases to 1%.
João Sousa, a financial analyst at Deco Proteste, also highlights savings certificates as one of the products to consider in the working capital, or safety cushion, which he recommends all families set up to deal with unforeseen events. The coordinator of Proteste Investe also advises setting aside the equivalent of six monthly family budgets (sum of the household wage) in risk-free and liquid products. In addition to savings certificates, João Sousa recommends applying a portion to time deposits (despite their interest rates remaining below 1%) in a short-term strategy.
“Before we think about monetizing savings, it is important that people actually create saving habits,” adds Rui Bairrada. In other words, reinforce the head of the finance department, seeing savings as a monthly obligation, such as paying for water, electricity, rent or other fixed costs. “Whether it’s 10 or 100 euros a month, it’s important that they put some money aside each month to build up their emergency fund.”
Measure risk tolerance properly
Once the personal emergency fund has been secured, the conditions are met to take the next step. However, warn experts that it is essential to define goals and objectives. Why do I invest? More financial relief at retirement age? To buy a car? A house? For each case, there is a better – and worse – way to invest and a specific time horizon. It is equally important that each investor understands their risk appetite, for a more informed and adequate school.
At this point, João Sousa recommends for the medium and long term building investment portfolios with a mix of more volatile products, such as stocks and bonds, that serve the function of risk mitigation.
In a more defensive profile, the analyst recommends a portfolio with 25% investments in equities and 75% in bonds. A mix that reverses when an aggressive portfolio is created, with a greater focus on risk.
In terms of a medium risk profile, João Sousa proposes a balanced portfolio, investing 55% in equities and 45% in bonds.
Whatever the option, emphasizes Rui Bairrada, “it is essential that people learn about the types of products, their performance history and the relationship between risk and potential return, and that they never invest in products they are unfamiliar with or Not Knowing.” to understand”.
Especially for those with no investment experience, both analysts recommend starting slowly and building up over time, always following the evolution of your portfolio. If they resort to a financial intermediary, they should carefully analyze the product offering, the level of customer follow-up and the price list. “And remember that ‘zero commissions’ does not mean that they will have no costs,” warns the CEO of Doutor Financeira.
For more experienced investors, Rui Bairrada points out other alternatives, such as investment funds, ETFs, stocks, bonds, among others “which can offer much higher returns, but on the other hand carry more risk”.
Determining financial soundness in actions
If risk is not a barrier to investing, the stock market is always a good option. Experts say there are good choices in some markets right now as stock markets have fallen significantly in 2022 and therefore there are interesting opportunities to acquire and hold. “It will be a medium-term investment, as no extraordinary increases are expected next year,” says João Sousa.
Still, there are sectors worth exploring, such as renewables (which are benefiting from the energy transition), defense (an area that has benefited enormously from the war in Ukraine and countries’ growing need to strengthen their security investments ) or the pharmaceutical sector, with growth potential due to the aging population.
The area of oil companies, for example, is to be avoided, which faces the challenge of the energy transition, which imposes high costs on these companies. According to Stefan Hofrichter, Director of Economics and Strategy at Allianz Global Investors, next year “could be the ideal time to position portfolios for the long term with a focus on themes such as national security, climate resilience and innovation, and sustainability.” “.
PPR: thinking about reforms
Another investment recommended by analysts, because of its importance at the time of retirement, but also because of the profitability it can guarantee, is the retirement savings plans (PPR). João Sousa advises that this is an investment product “as soon as possible after entering active life. Because the sooner, the greater the capitalization obtained”. Rui Bairrada shares a similar view, pointing out the importance of this type of product being seen as an expense in the monthly budget and thus as a value set aside each month. “It’s a very interesting instrument,” he says.
The age at which a PPR is formed also determines the choice of options with more or less risk. Before the age of 50, advises João Sousa, preference should be given to income with more risk and above this age one should opt for guaranteed capital and lower risk.
Source: DN
