There is a warning in almost every communication in the traditional financial market: “Past performance is no guarantee of future results”. It's probably some stupid CVM rule or other regulatory agent paid with our taxes.
However, this time it is possible that they hit “the bull's eye”; after all, every broken watch runs twice a day. The truth is that all these equity and multimarket funds will perform very well in the next 3 years. We are talking about 1,000% increases in the period, something that this under-45 generation has never seen.
The Ibovespa has already gone up much more than you think
The Ibovespa index has already gone up so much that it has had to cut zeros several times in history. Infinite High! I'm not kidding, I swear it.
Above we have Argentina's stock index, the Merval, going into exponential growth. Economic miracle? No, currency devaluation. In the case above, past performance 'guarantees' that this index seeks 1 million in local currency, or even more.
The big question is: are these investors getting richer? In this case, after just over 10 years, the index is at the same dollar value. Basically, the same return as gold : zero. Meanwhile, the average value of real estate in the US has risen 100%.
50% loses to the benchmark
There are managers who have managed to make money in Argentina, whether by selecting a better stock basket or entering periods of crisis. Every normal distribution of returns brings about 4.5% way above the mean. If 1,000 funds have tried their luck there in 10 years, probably 45 of them will perform spectacularly.
He doubts? Well, a study with 176 free stock funds between 2016 and 2020 in Brazil showed that 45% of them performed below the Ibovespa. I didn't see the chart, but I can bet there were about 8 with returns of 100% or more above the index.
Anyway, if you are an excellent trader , or the manager of your favorite fund knows how to navigate this environment, go for it. However, be aware that, on average, variable income will be close to the index. The same goes for investors in ADRs, the shares of US companies listed on the Brazilian stock exchange, against the S&P500.
The litany of dividends
Another story that investment advisers and analysts often tell is the so-called “dividend portfolio”. In fact, there are stocks that distribute the equivalent of 20% a year, but these TradingView and similar charts are already adjusted.
If you had free money, someone would have bought it, rogue. You can check the performance in the graph below of 3 major dividend payers: Itausa (ITSA4), Vivo (VIVT3) and Taesa (TAE11).
In short: they're all going to get rich, they're just not going to make money.
About the author
Marcel Pechman worked as a trader for 18 years at UBS, Deutsche and Safra banks. In 2017, he became a cryptocurrency trader and analyst. Convinced maximalist, he also subscribes to the RadarBTC Youtube channel .
The Ibovespa post may rise 1,000% in 4 years, but no one will make money first appeared on Bitcoin Portal .