Despite the fact that uncertainty generates risk aversion, experts assure that temporary moments, such as those experienced today with the conflict in Ukraine and the proximity to the presidential elections, can generate investment opportunities.
“Where there is uncertainty and risk, there is profitability. If you want to have a profitable portfolio, you have to take risks,” noted Andrés Moreno, a financial and stock market analyst.
Experts consulted by LR assured that global uncertainty causes some assets to drop in price, which creates an opportunity in the market to buy cheap. While the electoral uncertainty helps the assets have atypical prices that can be taken advantage of.
“The devaluations end up being opportunities, we are going through a moment with the implications that the increase in interest rates has to contain inflation, but business is business, and what becomes cheap due to this situation will be an opportunity purchase,” said Arnoldo Casas, director of investment at Credicorp Capital.
In addition to the above, investing becomes even more important considering that the prices of goods and services have registered an upward trend since last year, with which people have lost part of their purchasing power, that is, with the same amount of money cannot buy the same thing as a year ago.
In Colombia alone, inflation reached 8% annually in February and analysts expect the indicator to remain above the target range of the Banco de la República for the remainder of this year. In fact, the Issuer began the normalization of its monetary policy last year and the reference interest rate is already at 4%.
With this scenario, Alexander Ríos, director of the Inverxia financial education project, assured that it is key that people invest so that they cover their capital from the effect of inflation, in addition to having the possibility of generating returns above the indicator.
“It is important to understand that our savings are not going to generate returns by themselves, neither under the mattress nor in a bank account. In the society in which we live, where economies are highly sensitive to external shocks, inflation is the first enemy savings,” said the expert.
And then, what to invest in? Although you can opt for assets that generate returns tied to inflation, Ríos recommends looking for options that generate higher returns, yes, taking into account the level of risk aversion of each person. In addition, he suggests doing it with the advice of experts.
“In inflationary environments like the one we live in, our duty as savers is to look for better alternatives: there are stocks, high and medium risk bonds, Colombian and international ETFs, indices, raw materials… There are many instruments that people can use, at your fingertips, to structure your own portfolio, seeking better returns that mitigate the impact on the saver’s pocket,” Ríos noted.
Additionally, Moreno assures that in the colombian bag there are business opportunities, because the shares are not overvalued.
“In the case of the Colombian Stock Exchange, the shares are not overvalued, if it were not for the uncertainty we would have a much lower dollar and much higher shares. Some people are believing that, but we need the electoral uncertainty not to be become a problem, that is, those people who risk in uncertainty can also lose money, but if they don’t, they lose it and if they leave the risk play in favor, they can earn great returns,” he said, and pointed out that “then it is worth the It is worth diversifying portfolios despite the current situation, especially in countries that are not overvalued, such as Colombia.