Ueslei Marcelino/REUTERS
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Since the disclosure of a material fact by the American (AMER3)revealing an initial gap of R$ 20 billion and subsequently correcting to R$ 41.2 billion in the judicial recovery request, the value of the shares fell by more than 90%.
This is probably the largest case of its kind in the history of the Brazilian financial market and the losses of investors who own shares, bonds or who invest through investment funds with a certain percentage of capital allocated to the company’s assets will certainly be enormous. Some real estate funds are also exposed to Americanas risk as owners of properties leased to the company.
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It is still difficult to know the extent of the damage that this accounting violation and the judicial reorganization (RJ) of Americanas SA will inflict on investors and the financial market as a whole, but it is already possible to draw some important lessons from this event.
Diversification is your best protection
Even if you have a good understanding of the stock market and understand the risks involved, it is not advisable to invest more than 10-15% of your variable income capital in a single company. .
When you become a partner in a company through the purchase of shares, you will have a share of its results, whether they are profits or losses. Sure, cases like the Americans are the exception and not the rule, however company insolvency is one of the risks you take when you become a shareholder.
Understand the characteristics of the sectors of the economy
B3 has a sector classification of listed companies, based on the segment in which they operate. To set up a diversified allocation strategy in line with your goals, it is important to know these sectors and understand the dynamics of the economy to which they are more or less sensitive.
Retail trade, for example, which is the segment in which Lojas Americanas operates, is a cyclical sector, i.e. its performance is strongly linked to economic cycles, being influenced positively or negatively by inflation, the exchange rate, the Selic, among others. Therefore, it tends to have more volatility and uncertainty.
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To invest in assets with these characteristics, it is necessary to have a very good understanding of the macroeconomic risks that can affect your earnings prospects, in order to define an exposure percentage that makes you feel comfortable even in the midst of alternating economic cycles.
If you still can’t establish risk x return correlations, but still want to invest in the stock market, give preference to more perennial sectors, such as energy, sanitation, banks.
Fixed income also has risks
Even those who do not want to face the risks of the stock market, and choose to invest in fixed income, are subject to the fluctuations and risks inherent in the securities they buy.
By investing, for example, in bonds, you lend money to a company in exchange for receiving interest on the principal invested. In this case, you are assuming the credit risk, i.e. if the company enters judicial recovery or has filed for bankruptcy, there is no guarantee that the creditors will receive the debt.
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Before buying debt securities of any company, it is advisable to consult the accounting records and understand the degree of indebtedness and the ability to repay debts.
You need to understand the composition of a fund before investing
In order to provide returns in excess of the CDI, several fixed income funds, according to their regulations, may invest a percentage of their assets in private debt securities such as bonds, CRIS, CRAS, as well as equities, derivatives, etc., within the would be each fund’s share of risk exposure.
Carefully reading the fund sheet to understand the degree of exposure to which the stock is exposed is essential for understanding the associated risks and, therefore, choosing funds whose management and asset composition are in line with one’s profitability objectives and risk profile .
Create a habit of accessing the IR area on the websites of the companies in which you invest
Accessing the Investor Relations area on the companies’ websites and reading the accounting reports, monitoring the dissemination of results and interpreting at least the basic balance sheet data is something that every investor should do periodically to understand the fundamentals of the company in which he invests and, being able thus deciding whether or not to keep a certain asset in the portfolio.
Studying is one of your biggest investments
It is certainly not necessary for you to become an investment expert, however, spending some time during the week studying the essential concepts of the financial market will be very useful in choosing your investments and above all in mitigating portfolio risks.
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Every investment involves risk
In both variable income and physical income, there will always be some degree of risk. Obviously the risks are different according to the characteristics of each asset and, invariably, the risk is proportional to the return offered.
Therefore, your investment strategy must include risk management, building a portfolio that is diversified across various asset classes and compatible with the terms and objectives of each of your invested funds.
Understanding the types of risks inherent in the financial market is as crucial to the success of your investments as your ability to make contributions, so don’t neglect this study every time you intend to make a new investment.
Eduardo Mira holds a degree in telecommunications, with a specialization in business education and an MBA in investment management. He is a CNPI analyst, certified CPA10 and CPA20, former manager of Banco do Brasil and Modal brokerage.
Signed articles are the sole responsibility of the authors and do not necessarily reflect the opinion of Forbes Brasil and its editors.
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