This December vacation, during a conversation with a friend about investments, I asked him how his financial assets were doing. Here he answers me, to my astonishment, that last year he was unable to invest much, as he was going through a very negative phase in his life . I was curious and asked for a more detailed explanation. It was then that he explained that personal problems, such as pressure at work and lack of time for daily activities, left him so depressed that several of his appliances, such as the microwave, television and refrigerator, suffered an electrical short with no apparent explanation. These problems ended up keeping him away from investments. 

Even without any apparent savings, my friend demonstrated courage and asked the following question:

What are the most recommended investments for 2024?

My answer was: Assuming that your appliances no longer have problems in 2024 and you can save some money , here's what I would do instead:

Fixed Income in the United States

Image 1: American interest rates in October 2023. Source: FRED

There is still room for fixed income . When we analyze interest rates in the United States , we see that they are still close to the peak recorded in October 2023. Thus, we have a window of time until the next FED meeting to closely examine the US Treasury.

Fixed Income in Brazil

Image 2: Interest rates in Brazil . Source: ADVFN.

Here in Brazil, there is an expectation that inflation for 2024 will be close to the target established by the Central Bank of Brazil ( BACEN ), around 4% per year. This makes some fixed income securities attractive, such as government bonds ( NTN-F, NTN-B, LFT ). Corporate securities, such as debentures and bank papers , are also attractive in this wide range of options available to investors . However, it is crucial to carry out a credit assessment to avoid losses arising from possible defaults .

Variable Income in the United States

In the United States, where the majority of technology companies , which hold the greatest growth potential , are located, there may be room for expansion. However, this will depend on the results delivered by these Big Tech companies at the end of the fourth quarter , to understand whether they are obtaining positive results in an environment of inflationary pressures, which increase costs, and at a time when there are fears that sales revenues fall short of the projections that justify their valuations and high multiples . Therefore, make the most of the short term and wait for the results to be delivered to judge the validity of the investments in the long term.

Variable income in Brazil

Image 3: Focus Bulletin of January 8, 2024. Source: BACEN

Brazil is a destination for many foreign investors, with great enthusiasm for investing in our energy matrix, mainly by Chinese and Arab investors interested in renewable and clean energy . The Brazilian stock market is still discounted compared to international stock markets , reflecting the greater risk of investments in land with lower credit ratings . However, be aware of the intimate correlation between the behavior of external and internal risk assets here in Brazil.

Commodities are also promising.

I have an appetite for investing in commodities and, this year, following the guidance of an analyst who advises me, I identify promising opportunities. Among those I follow, I highlight, for example, that beef cattle deserves the attention of investors .

Dollar Investments

As for the exchange rate , I haven't had time to make my prediction yet, but from what I observed last year, the exchange rate should remain stable , as it was already coming off a rally of exhaustion during the pandemic. As our country effectively fought inflation , there was no significant depreciation of our currency against the dollar ; on the contrary, there was an appreciation of the exchange rate . All it takes is for the government, families, companies and society as a whole to fight to combat unnecessary spending. This would help to have a positive balance in the economies, maintain a stable exchange rate , stable loan levels, healthy banking systems and enjoy all the benefits of being increasingly diligent with finances and money.

Finally, after all my explanation to my friend, it was my turn to continue the conversation. I took the courage and asked him: but what did you do to stop your appliances from burning? His answer was even stranger: "I took a bath in coarse salt." That in 2024 we can remain positive, with or without a salt bath, but that we can also review and check the electrical systems, which, in the case of the investor , is nothing more than the logic and rationality behind every investment.

If you need a CNPI analyst for your investments, contact Wagner Geremia.

Cover Photo by Unsplash/ Ravi