We have reached the middle of the year, and it is interesting to stop to see how it has gone. So far in 2023 and according to INDEC, year-on-year inflation -until May 2023- is 114.2%, which leads us to review what tools are available to combat it or at least obtain coverage. The collection of the Christmas bonus is an opportunity to find those instruments in the Capital Market in order to make those extra pesos yield.
Making a comparison between inflation and the S&P Mervalin the last 12 months, this recorded an increase of 405.88%, reflecting the performance of Argentine stocks.
Let’s remember, the S& PMerval is the index that it measures the evolution of the shares of larger and more liquid companies in the local market, which is why it is a good reference for those who seek to start investing in the medium and long term. Always taking into account that shares are variable income instruments, that is, we do not know their future profitability.
For those who are interested in investing in the long term in different sectors, diversifying risks and thinking of renowned companies that are not listed on the Argentine stock market, there is the possibility of doing so through the Argentine Certificates of Deposits (CEDEARs).
CEDEARs are titles that represent shares of listed companies in international markets and that can be traded on the Buenos Aires Stock Exchange.. It is a good tool to be able to acquire shares in companies at a very low cost, since one of these titles can represent a fraction of a share, since there is a conversion factor.
Thus, a CEDEAR can be equivalent to one tenth of a share, and therefore cost less than the entire share, in addition to being an implicit way to hedge against exchange rate fluctuations, since these instruments are quoted both in pesos and in dollars.
In practiceis very similar to buying a stock in that it is also an equity instrument. This means that its price in the secondary market varies constantly due to various factors and there is no way of knowing the future profitability of the investment.
The procedure is simple. To better understand, let’s imagine that an institution buys a share of a company abroad, then issues a certificate that is publicly listed on the Argentine Stock Exchange and replicates the evolution of this share acquired in the first place in its market of origin. Another fact to take into account: currently, most of the CEDEARs listed on the local market are issued by comafi bank either Stock Box.
Meanwhile, for those who need those extra pesos from the bonus, either to pay off debts, advance purchases, etc., there are also investment alternatives that will allow them to obtain, even if it is, a small safe return in the short term.so they can generate a profit with those pesos, and still use them as they originally intended.
For those cases, there is an instrument called stock bondAlso known as “the stock market fixed term”, a nickname that perfectly serves to explain how it works, since it is a short-term loan guaranteed by the market. Here, the funds are immobilized for a period of time, which can be from 1 day to a maximum of 120 consecutive days.
The fact that it is guaranteed means that the person who places the surety is certain that he will collect what he placed, plus interest in the agreed time. For example, it may be the case of someone who plans to use the bonus to pay a debt that is due 10 days after collecting it. You could place a security during those days until maturity in order to generate interest on the initial amount, and use that extra money for any other purchase.
These alternatives can be part of the toolbox of those who wish to save and invest, so that they can generate benefits on the money they need to use in the short term, as well as build an investment portfolio for the medium and long term, in order to achieve their goals.
Source: Ambito
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