Brazil, being one of the world’s major powers, has always been a tempting place to invest. Of course, it is not easy with the hurdles from the government and the oddities of the culture. The banking industry, in particular, has been in a weird place in the past few years and Igor Cornelsen had detailed his opinion on that issue.
At least in the business world, the policies of Dilma Rousseff had been rough on multiple sectors of business. With populist political policies wrecking the banking atmosphere, the only banks to come out on top were, Itau Unibanco (ITUB) and Banco Bradesco (BBD). These two banking giants could have resistant any financial disaster due to their sheer size and smaller banks ended up being absorbed.
Melhorar a mobilidade e a poluição em SP é simples, pedágio urbano tiraria muito carro da rua aumentando o conforto e o custo para o usuário
— igor cornelsen (@igorcornelsen) June 19, 2013
According to Igor Cornelsen, banks are becoming even more strict with lending and only giving to those that have amazing credit. Those at the lower ring of society will now have to deal with public banks or a pure cash lifestyle that is typical in third-world countries. It leaves those without capital with fewer opportunities to borrow for their business plans and those that are successful will have lines of credit.
With such a disastrous situation with the financial market, Igor and other experts find it silly that anyone still wants to invest in Brazil. There is a boom in population and small businesses but the infrastructure is not improving enough to accommodate everyone. With corruption in the fray, it leaves job creation and wealth inequality even more exaggerated than previous years.
Having said all of that, Igor still recognizes that Brazil is one of the world’s top food producers and is the largest country in South America. The future potential of the country cannot be ignored, even with crippling bureaucracy.
More Focus Should Be Put on China
We cannot ignore the fact that China is now the largest economy and they are always investing in public and private infrastructure. When China has an industrial boom, Brazil is one of their top partners to provide raw materials to meet their demand. As far as industrialized products are concerned, Brazil cannot compete with China on most fronts.
Is the Real Worth it?
Igor, being an expert on foreign currency trade, knows that the Real has been overvalued for too long. As a result of the government’s stubborn currency controls, Brazil is not very competitive with export prices. Especially within the past couple years, the shady inner-workings of the government has caused even more debt that is starting to take effect for the average citizen.
The new administration of Brazil is looking towards less intervention towards currency controls, which may have disastrous short-term effects. Although these effects may hurt, it is simply alleviating pressure from past government decisions.
Brazilians Need to Learn Personal Finance
Many people around the world, but particularly Brazilians, need to learn more personal responsibility rather than dependence on the government. With some economic stability, the average person can even look towards investing to extend their net worth even more. The goal is always to minimize the risk but some people may benefit by extending into riskier investments if they understand the risks.
Igor believes that it is important to get started investing as early as possible. This way, someone can get the learning curve out of the way earlier in life and with smaller amounts of money. Getting in early on an amazing investment will also assure huge returns, especially if it is a long-term investment.
It is hard to time the market just right, which is also why he advising staying away from day trading. It is better to think about the big picture and take stocks long-term rather than obsessing over the day-to-day. When it comes to the stock market, he also advised to diversifying into smaller stocks to make bigger gains.
Diversifying should also be a priority in Brazil, considering the political and economic insecurity. Looking at Venezuela, people that did not diversify their net worth are not suffering the consequences. Foreign currency, precious metals, real estate and even crypto-currencies are worth looking into.
In the end, the survival of Brazil’s upcoming financial disasters will be on the shoulders of the people rather than the government. Securing one’s assets is never something that the government is responsible for, even if there are big promises being made. If you are not a professional investor, you can even consult with an adviser to show you how to invest and diversify.
Igor Cornelsen is one of the best international investors from Brazil. His advice should definitely be taken seriously. He made a fortune investing in international commodities and companies and he has diversified outside of the country long ago. He now resides and does business in South Florida and he is not sure about relocating back to Brazil.
Currently, he works with Bainbridge Inv Inc making great things happen in the stock market. He had also had a lifetime of holding high-level positions in several Brazilian banks so he knows the economy like the back of his hand.
Most of his consulting work has to do with guiding high-net-worth investors into profitable ventures. He mostly likes to deal with re-building stocks rather than actual companies. He believes that there are always great deals in the stock market and his picks almost always make a decent profit.