Inflation, currency tension and electoral uncertainty form a combo that makes almost all Argentines think every day about how to preserve the value of their money. The volatility is so high that many of the small savers and investors do not dare to look at a longer horizon to the next six months, to make a definitive decision regarding the management of their capital.
Usually, financial experts recommend choosing the investment according to the risk profile of the one who plans to make it. "Are you willing to earn more but perhaps with a higher degree of uncertainty? Or do you prefer to secure the capital, with a lower associated return?", are the typical questions that are asked to know the identikit of an investor and offer a menu of options according to these expectations.
But can investments be chosen according to the "urgency" in disposing of the money? The search for coverage often competes against liquidity, so necessary for savers and companies in times of spiraling inflation. Clarín made a racconto of the options that exist in the market, local and international, according to the time horizon that is sought to be raised.
Investment less than a month
Managing liquidity and above all preventing pesos from losing value with inflation galloping at 8% per month is a common concern of people and companies. "Do not let the money sleep" became more of a necessity than investment advice. For the day to day, different options appear in the capital market, from the so-called "money market" funds (which invest in short-term financial instruments) to stock market bonds.
Augustine Honig, CEO of Banza, the Fintech of Adcap Grupo Financiero, said "for those who invest in the very short term, but have a conservative profile, money market funds are growing a lot. They continue to be the highest net worth assets under management, representing 53% of the industry. It is a demonstration that investors are adopting a cautious attitude due to the high uncertainty of this election year."
Diego Martínez Burzaco, country manager of Inviu, said: "Let's start with the most normal of all, which is a common money market investment fund. There you have immediate liquidity. I also like a little more the stock market bonds, which is like a fixed term in the Stock Exchange, which yield on average more than a money market, are at a nominal annual rate close to 85 to 90% and can be made and constituted in terms of 1 to 120 business days ".
"By operating a bond, the investor lends money to the policyholder and obtains an agreed interest rate on the operation. From the beginning, the return on investment is known, since a pre-established interest rate is established and the effective rate for the duration of the bond is calculated. This provides certainty about the returns that will be obtained, "explained Maximiliano Donzelli, head of research at Invertir On LIne.
One to three months
Going through the turbulence until the PASO may make investors prefer to insure themselves "against all risks" and seek to hedge against the jump in inflation and a potential adjustment of the official exchange rate. Juan Manuel Franco, from SBS Group, explained: "In terms of strategy, the high-frequency data we monitor continues to point to elevated inflation records during May, so we maintain the preference for CER in the peso space."
Franco especially recommended the Boncer T2X3, which expires on August 13, the same day as the PASO; and the letter CER, X18S3, which expires a month later, on September 18. "As for fixed rate, we continue to prefer synthetics with dollar futures and dollar linked to July, always highlighting the mark to market risk in the face of episodes of volatility," said the economist.
Martínez Burzaco agreed: "The best thing is either a T+2 fund (a fund in which investors must request the redemption of their silver two days before receiving it) that invests in LECER (Treasury bills that adjust for CER or inflation) or directly buy a LECER maturing in July."
The economist clarified that these instruments "compete" for yields with the UVA fixed terms, tied to inflation, but that they have the advantage of liquidity, since the latter the requirement is to leave the capital immobilized for 90 days.
Three to six months
After the very short term, investors will be able to look at other alternatives to surf local volatility.
"Leaving aside the short term and hedging options, the best opportunities are between Cedears (foreign shares that can be bought in the country and are quoted in dollars) and local stocks, although they are long-term investments. The current context is one of high volatility and no defined trends in global markets. However, the Fed's more aggressive rate hike phase could be behind us, so the companies that hurt the most from the rate hike, namely Big Tech, currently have attractive entry levels for investors," Honig said.
"On the other hand, the phase that the global economic cycle is going through favors the shares of consolidated companies that regularly pay dividends to their shareholders. It is a very attractive option for those who want to add to the capitalization obtained from the investment in shares or Cedears, the income from the payment of dividends, "said the CEO.
Six months to one year
For those who dare to the "electoral trade", Martínez Burzaco said: "If the time horizon is 12 months from here, and you want to take risks, it seems to me that today the risk-return ratio is more favorable for sovereign bonds in hard dollar than for stocks. On that investment horizon."
In the local stock market Martínez Burzaco finds opportunities: "Although they have already risen, many of them still have a very attractive intrinsic value, thinking about a country that normalizes at least part or that leaves this economic situation so day to day to think something more than months or years", Said.