How to invest in 2024: Fixed income strategies to maximize your investment

The turn of the year is usually a time of reflection and expectation – have we had a good year? What can we do better? In addition to the emotional and personal aspects of these questions, they also extend to the world of investments. Investors often begin to wonder whether they are maintaining an adequate investment portfolio or whether they should take more action. More specifically, the question is: How can I put myself in a position to make the most of “this year’s emerging asset class”?

My belief, when looking at the 2024 economic scenario, is that fixed income will be a favorable asset class for investments. Specifically, I see great potential in real interest bonds (IPCA+). This perspective is supported by two main aspects: the inflationary protection these bonds provide and the high bonuses they offer – about 6% per annum higher than IPCA estimates.

Why consider fixed income?

The real interest rate paper (IPCA+) is a valuable asset in an uncertain economic environment. They provide protection against inflation, meaning the value of your money will be protected regardless of how the economy behaves. In addition, these bonds provide a high rate of return, making them an attractive investment opportunity.

How do I benefit from fixed income?

If you’re considering allocating a significant portion of your investment portfolio to fixed income, there are some important points to consider. First, you need to determine your investment goals and assess your risk appetite. Investing in something means accepting some risks easily, but knowing your comfort limits regarding them is crucial to making wise investment decisions.

Next, paying special attention to future cash needs is essential. Disposing of an investment before maturity may result in irrecoverable losses. Therefore, ensuring a strong financial reserve before investing is vital. In addition, consideration of future needs or desires can help guide resource allocation and planning for potential divestments.

The last point, but not least, is diversification. Spreading your investments across multiple uncorrelated assets can help reduce risk while maintaining a reasonable return. Furthermore, diversification should be considered in terms of return type (post-fixed, ex-return, hybrid with inflation correction, etc.) and geography.

What are the benefits and risks of fixed income?

Despite its many benefits, fixed income also presents some risks. Credit risk is one of them. Anyone investing in fixed income should always be aware of the issuers of the securities that make up their portfolio. Likewise, liquidity risk can turn a good-looking security into a financial nightmare if you need to sell it quickly. Regulatory aspects must also be taken into consideration, as some types of private fixed income securities offer an income tax exemption, which may increase your return.

In conclusion, fixed income, especially in the form of real interest bonds (IPCA+), provides a safe and profitable investment opportunity for 2024. However, like any investment, reward comes with its risk and resource allocation must be planned carefully. Furthermore, obtaining professional guidance can help you navigate the complex world of investments more efficiently.