In recent years, the Brazilian foreign exchange reality has been a roller coaster. Our currency devalued exponentially, fluctuated as the global economic scenario gave sighs of improvement and has now returned to a level that many experts consider fair, taking into account the history of domestic and foreign inflation.
All this soap opera confused novice investors on a basic point: after all, is it worth investing abroad? What is the right time? Is the dollar expensive or cheap? Check out the analysis below.
Some investors threw themselves into this modality because of all the conflicting scenarios. Lockdown, war in Eastern Europe, stagflation, and so on. Other investors were even more frightened and preferred to wait.
In a way, we cannot say that one or the other did it right. Above all, we need to understand our willingness and ability to take risks, and where we feel comfortable leaving our resources.
However, it is a fact that investing abroad brings several advantages. Investment diversification; reduces risks, mainly the concentration on Brazil risk; expands the range of assets and opportunities; and still exposes a part of its equity to a hard currency.
One of the most important points is the dollar’s relationship with all other currencies in the world. Regardless of the momentary devaluation of the dollar against the real, it has not ceased to be the most influential currency in the world, as well as the one where, in times of crisis, everyone seeks it. A worldwide consensus is the use of the dollar as a store of value.
I understand that, at times when the dollar rate was close to R$6, it was difficult to think about investing abroad. Yes, especially if you wanted to send a relevant portion of your equity. However, one of the best strategies is to invest slowly. While you don’t want to invest abroad because the dollar is expensive, you may be missing out on many great opportunities.
An important fact to keep in mind: the exchange rate fluctuates a lot, and predicting these fluctuations is practically impossible. However, the trend is for the dollar to appreciate more and more over time. In the compiled, the dollar will always be more and more expensive.
While we have this very difficult variable to predict, the dollar, we must focus on what we have the power to choose: good investments for our portfolio.
Don’t let things out of your control affect your financial reality and make it impossible for you to make good decisions.
