FinGurú - Tips for investing by gustavo neffa

Argentine peso as a means of change and value reserve

We all know that the Argentine weight has ceased to be a valuable reserve for many decades. Only if it fulfils its role as a means of change (when a cross the border ceases to be immediately) and on average meets the definition of numerary, because prices are often fixed in dollars when there is no reference in weights given an inflation that is projected around 120% for this year). If you want to know the reasons for the monetary disaster in Argentina, I will have to explain this in another note, but this led to the fact that, for example, from January 2022 to April 2023, the value of the weight fell more than half of its value (-52%).The dollar is and will continue to be a reference value and a value reserve. Argentina is the second country with the highest amount of physical notes circulating in an economy outside the US and its constant desire sums up the sum of all our fears. But what is so stable is this currency over time? Not in terms of others, because its sporadic appreciation gives it a plus in relation to other currencies over the past decades, but it is also necessary to calculate the loss of value of the dollar in time measured in terms of purchasing power. Inflation reaches all economies and prices go up, even in the US, which had an inflation of 9.1% in the middle of last year. In the past 10 years, its value has decreased by about 20% (veine percent) in terms of average purchasing power using the retail inflation rate. Is it?One of the advice to invest is not to have the dollars in the mattress, or in a security box, because they are no longer productive or generating value, but rather a headache, not to mention whether there is a physical deterioration.Saving is important, it is safety to keep balances available and have some peace of mind. But generating value from there is so much or more important. It means investing. If you do it as cover at least serves, better still generates value. That is, if we invest smartly so that money can multiply. It means clinging to the luck of an asset whose success depends on other people (buy a bonus or an action from a company) or directly undertake and take risks leading an idea to practice in the real economy.Investing is fundamental, means making it grow in order to overcome the loss of purchasing power that wears the investor's pocket month by month. The key variables to invest are the risk one wants to take, the return one wants to have and the investment horizon with which an account, three variables closely related to each other.In 30/10/2008, when AFJP, the accumulated savings of its taxpayers amounted to US$ 28,744 M. Adjusted by US inflation, this value should be today $40,000 M, this is the calculation you have to do so that at least cover this fall. Today, Anses' FGS assessment is more than US$ 56,434 M, which would seem a lot, but first one must see the quality in which one is invested (many obligations of Argentina) and make the calculation of whether they had invested in another unsatisfactory asset of the local risk as it would have surrendered. If that money had been invested in S&P 500, that fund today would amount to more than 100,000 thousand M.

Tips for young people: to undertake, invest in the scholarship and the cost of a graduate

I use the youngest to do, to bring an idea to practice, something that generates value, or to invest their savings in a company through the purse so that others do it for one, having the time in our favor and without needing that capital for a good time, letting it mature with a great risk so that it becomes a reality on tomorrow. Failure is part of the path to success.The cost of an MBA in the US today varies from US$30,000 to $80,000 on average (although often the same university gives a loan or a scholarship to study). But young people already prefer to spend this money in advancing their own project, which I celebrate on the one hand, but it implies a volatility of the far greater and dangerous future incomes.If they decided for a postgraduate degree, business graduates chose in the past consulting in a large company or a recognized bank. Today the dream passes by starting its own startup, which part of an idea of the same study campus. The path opens to start a startup when you find a good partner, seed capital or an angel investor.Being in the corporate world, when you give more to the company than the company brings you, it is time to leave and arm your own enterprise based on the experience travelled in the corporate world, having capitalized everything good, as well as bad experiences as well.Today, the new post-pandemic reality, especially the remote work and the relocation that this generates, ubiquity is a facility that - in addition to the difference of change in Argentina - with the level of education that exists to assert itself. The new generation of digital nomads from other countries earning in hard currency and spending in Argentina know that.And if you decide to invest in the bag, you need to know that the bag is not for anyone, and no one more clear than Warren Buffet to illustrate, by stating that if one is not willing to tolerate more than 50% drop in our stock positions, the bag is not for one. Fortunately, there are ways of not reaching such a loss using the basic rules of the investment world such as diversification, the use of derivatives or the selection of less volatility assets, or styles: value actions (more conservative) vs. growth (more volatile).For example, META (the Facebook holding company) fell 64% by 2022, but would rise 96% in a few months of 2023 to the closing of this note. Inentendible the fall of a company that generates about 28 quarterly Bn and 6 Profit Bn (net margin of 21%), both above expected. It is because many other factors must be taken into account, such as those around the company, for example the amount of money that prints the central banks, which facilitate speculation and/or its unbridled sale.Investing is to make money grow, but before nothing protects it, it is to cover the devaluation of the domestic currency and the loss of purchasing power of money against high inflation.One way in Argentina to do it is to buy sovereign obligations hard-dollarAlthough the risk is very high. The negotiable bonds in dollars are a better alternative, but the dollars are still generated to pay their debts. Fixed-rate bonds only serve when the rate exceeds devaluation (or there is appreciation) and expected inflation and when the rate is high in relative terms. In a context such as the current, weight coverage in Argentina of 2023 may occur the variable rate: With CER or with double bonds (which pay inflation or devaluation, which is higher), obligations dollar linked Attended to the official dollar and obligations at Badlar rates (variable income depending on the fixed-term rate of majority).Another way to do so in a smart way is to do so through domestic exporting and/or active domestic actions abroad, or directly in actions of foreign companies (through the CEDEARs program). For example, and although since January 2018, S&P Merval needed to rise 35% in real terms to match its previous value, the local stock index won inflation 150%. Measured in dollars is in values below the historical average: today it is worth about 650 dollars against 1800 of 2018 and the 1000 dollars in PASO 2019.Another way to cover in difficult times for the economy is by purchasing real, non-financial assets. Gold is a historical coverage against inflation, although it usually clings more to the dollar drop and interest rates in international markets.For those who have business, stock of goods is usually a clear speculative position, provided they are non-perishable goods and/or pass fast fashion.Real estate and cars enter the coverage menu as winners, but of course they generate costs and depreciate themselves with the simple step of time, in addition to their use. Bricks were a good investment in Argentina throughout history, but only to cover in many cases, with constant devaluations not. In fact, according to the Inmobiliary Ranking of Latin America 2023, Buenos Aires became the second most expensive city in the region to one of the cheapest. In the last three years, the values have fallen by 27%, since by 2020 the price per square meter was USD 3.003, and now is $2,362. The moment or entry point is very important here.I hope you served them this note, I thank them for their dissemination if they find it interesting.

5/5/2023 - economy-and-finance

Tips for investing

Argentine peso as a means of change and value reserve

Tips for young people: to undertake, invest in the scholarship and the cost of a graduate

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gustavo neffa

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