Inflation, exchange rate tensions and electoral uncertainty form a combination that makes almost all Argentines think every day how to preserve the value of your money. Volatility is so high that many of the small savers and investors they dare not look at a horizon greater than the next six monthsto make a final decision regarding the management of your capital,
Usually, financial experts advise choosing the investment based on the risk profile than you think you do. “Are you willing to earn more but perhaps with a greater degree of uncertainty? Or do you prefer to secure your capital, with a lower associated return?” of options according to these expectations.
But, Can investments be chosen based on the “urgency” of having the money? The search for cover often competes with liquidity, so necessary for savers and businesses in times of spiraling inflation. clarion He summarized the options that exist in the market, local and international, according to the time horizon that we are trying to consider.
Investment in less than a month
Manage liquidity and above all, preventing the pesos from losing value with inflation galloping at 8% per month is a common concern of people and companies. “Don’t Let the Money Sleep” it has become more of a necessity than investment advice. Every day, different options appear on the capital market, from the so-called money market funds (who invest in short-term financial instruments) to stock exchange guarantees.
Augustine Honig, CEO of banzathe Fintech of Adcap Grupo Financiero, said “for those who invest in in the very short term, but have a conservative profilethey are growing a lot money market funds. They continue to be the assets with the highest net assets under management, accounting for 53% of the sector. It shows that investors are adopting a cautious stance due to the high uncertainty of this election year.”
Diego Martínez Burzaco, national manager of Sendhe said: ‘Let’s start with the most normal thing of all, which is a money market mutual fund. There you have instant liquidity. a fixed period in the stock marketwhich yield on average more than a money markethave a nominal annual rate of between approximately 85 and 90% and can be carried out and set up in terms of between 1 and 120 working days”.
“When issuing a surety, the investor lends money to the borrower and gets an interest rate agreed in the transaction. From the outset, the return on investment is known, as a predetermined interest rate is established and the effective rate is calculated for the term of the guarantee. This gives certainty about the returns that will be achieved,” he explained in the same line Massimiliano Donzelli, research manager at Invest On Line.
from one to three months
Going through the turbulence into the PASS might make investors want to be sure “against all risk” and try to hedge against a jump in inflation and a potential adjustment in the official exchange rate. Juan Manuel Franco, of SBS Group, explained: “In terms of strategy, the high-frequency data that we monitor continues to point record high inflation in Mayso we keep the preference for CER in the weight space”.
Franco especially recommended the Boncer T2X3, expiring on 13 August, the same day as the STEP; AND the letter CER, X18S3, which expires one month later, on 18 September. “As regards the fixed rate, we continue to prefer dollar-linked synthetics and dollar-linked futures in July, always highlighting the mark-to-market risk in the face of episodes of volatility”, said the economist.
Martínez Burzaco agrees: “The best thing is either a T+2 fund (a fund where investors have to request repayment of their money two days before receiving it) that invests in LECERs (treasury bills that comply with the CER or the inflation) or directly buy a LECER expiring in July”.
The economist clarified that these tools “compete” for returns with fixed term UVA, linked to inflation, but which have the advantage of liquidity, since the latter is obliged to leave the capital immobilized for 90 days.
from three to six months
After the very short term, investors may look to other alternatives to overcome local volatility.
“Short-term and hedging options aside, the best opportunities are between Cedears (foreign shares purchasable in the country and quoted in dollars) and local sharesalthough they are long-term investments. The current environment is characterized by high volatility and undefined trends in global markets. However, the more aggressive phase of the Fed’s rate hikes may be behind us, so the companies that have been most affected by the rate hike, i.e.big technology they currently have attractive entry levels for investors,” said Honig.
“On the other hand, the current phase of the global economic cycle favors the shares of established companies that regularly pay dividends to their shareholders. It is a very interesting option for those who want to add to the capitalization obtained from investing in shares or cedars, the proceeds deriving from the payment of dividends”, assured the Chief Executive Officer.
From six months to a year
For those who dare to do it “electoral exchange”, Martínez Burzaco said: “If the time horizon is 12 months from here, and you want to risk itIt seems to me that today the risk-reward ratio is more favorable for the sovereign hard dollar bonds than for actions. In that investment horizon.”
In the local stock market, Martínez Burzaco finds opportunities: “Although they have already risen, many of them still have a very interesting intrinsic value, thinking of a country that is at least partially normalizing itself or that is emerging from this very difficult economic situation, day after day to think about more than months or years,” he said.
Source: Clarin
