2023-08-21 12:48:00
By Laura Pereyra (PIN Capital)
I spoke with a friend this past Saturday. Not yesterday, the Saturday before the elections. He commented to me in passing and through his teeth, that he was running with a thousand things from his work in the week and that, in a hurry to close his day, on Friday he had placed his savings for another month at a fixed term. The day before the elections, “just in case”.
On Monday post STEP and dancing to the sound of the news that averaged the morning, I had already forgotten the conversation with my friend. In an attempt to bring some calm (?) to the markets, The Ministry of Economy established a fixed price for the wholesale dollar until October of this year at $350 and an increase of 21 extra points for the prize for immobilizing pesoswhich went from 97% to 118% in bank fixed terms.
I stopped by the Chinese supermarket near my house and spoke with Shakira, the manager. When I asked her why she had raised the packet of cookies by 50% in a week, she answered me -to my surprise- the same as my friend and in perfect Spanish: there were no prices from her vendors and so she did it “just in case”. She is already more Argentine than my passport, I thought.
- $350
- It is the official wholesale exchange rate after the devaluation, which will remain fixed until October.
Until now, in the midst of a maelstrom of news, the only thing that has remained stable is volatility. So the need to hedge against rising inflation is indisputable.
Several analysts consulted expect double digits for September and October, due to the survey of many “just in case” of various fundamental prices of the domestic economy. We have been delaying the increase in fuel prices for months, well below inflation. Services and health also suffered adjustments that will be reflected in prices. So where are we standing?
There are 60 days left until the presidential elections arrive. I invite you to think about those 21 extra prize points for immobilizing. Today a “term-fixed” is paid a 9.83% monthly rate. Against faster inflation or against such a restless dollar, do we seriously believe that this instrument is right for us?
Liquidity is something that should take precedence in our savings decision. The opportunity cost that we have when immobilizing capital today is very high.
Laura Pereira
PIN Capital
Liquidity is something that should take precedence in our savings decision. ANDhe opportunity cost of tying up capital today is very high. Is it enough to tempt those who want to risk nothing else changing in these 60 days?
The MEP dollar is still an option for the saver, but not for the investor. Whoever invests expects to receive a return, a difference for the capital pledged. The saver only changes instruments to protect value. And wow, whoever made the decision to switch to dollars 20 years ago has known how to preserve value to whoever did it by reinvesting capital plus interest in pesos since then.
Taking a series of our analyst friends from the Finquality team, who had $1,000,000 in 2002 and chose to establish a fixed term (reinvesting month by month) managed to reach June of this 2023 with $90,320,478. However, the investor who became a dollar at that time, at $1.7 per dollar, got $588,235. “Doña Rosa wins”, would say the baggers, since those $90 million pesos today do not buy more than US$184,327. A real and palpable loss of value.
As in every phenomenal mess, However, gurus have already begun to appear in newspapers and portals to recommend selling dollars at these prices in the illegal and parallel circuit of the blue dollar and place those pesos in a fixed term at these rates until they return to dollars again through the blank channel, through MEP.
There are several risks associated with this strategy. Above all, the possible tax problem that this entails for crossing the waters of a different river. If pesos enter the banking system without justification, the tax headache will be greater than the yield obtained. And in the background, the exchange risk. Who assures us that the exchange rate remains stable in 60 days to let us “bike” in peace with those pesos?
- 118%
- It is the annual nominal rate that pays a fixed term since last Monday, August 14.
Here’s some advice, paraphrasing a report I received this week: Do not make the serious mistake of trying to put a limit on the real value of the dollar in the middle of a nominal crisis. How much should the dollar be worth in six months if you think that what is coming is a spiraling of inflation? How much would it be worth if whoever wins in October plans to dollarize the economy? Do not paint scenarios that are not yet clear, there is a lack of data that we do not have. Let’s not try to assume, because we have no idea what is going to happen. Diversification and happy end of the year.
A simple investment? We have been singing it to you since June from this column: go directly through a Common Investment Fund that, with active management, will pass you from one instrument to another. It will give you the same fixed term (a little more or less) but you rescue in 24 hours. They are called in the jargon T+1 and if you order yourself to remember to redeem before 3:00 p.m. to receive the pesos the next day in your account, everything will be fine. Remember my friend, the one who made the deadline on Friday before PASO. On Monday he could have bailed out and dollarized his portfolio without any problem. Or just grab the new rate, if he wanted it that way. Liquidity rules, record it on fire. We are going to repeat it many more times, until you get bored of reading it and finally want to try to change your way of investing.
1692622296
#reasons #good #idea #save #invest