From January 25, 2016, to March 4, 2016, the ibovespa index increased by 29%.
From March 5, 2015, to March 4, 2016, the Ibovespa index fell -4.82%. (Annual result in thesis).
This was the last great volatility of bovespa last week, the index rose 30% in almost a month and rose 10% in two days. A few days ago I had said that the profitability of my portfolio was at -18% since I started. This is not easy and not for anyone.
The human being was not made for the stock market, this is not natural, it is a synthetic process created by contemporary financial capitalism, but you do not have to despair, supported by data, studies, and science you can know where you are treading.
For HOLDER that invests in good companies for the long term, the important thing is to increase the equity in a number of shares and their participation in each company. My portfolio is now at -5% profitability, the “gain” was impressive, in 3 years of the stock market I had never seen anything like this, “I earned $ 11,000 in two days worth of my portfolio, That brings back to a certain relief, but that in fact means nothing and does not change ANYTHING!
And that’s why I made this post. You can do your own study just comparing assets in Google Finance, which is very good. Remember to always look at the big picture, the decades going by and you in there.
I simulated in two images what happened between the indexes IBOV, SP500 (USA) and SMI (Switzerland).
In the first frame of a month: Switzerland fell 3.47%, Brazil rose 29% and the US rose 5.21%.
In the second chart, we have data for one year: Switzerland fell 11.47%, Brazil fell 4.82% and the US fell 4.87%. See here was “injury” to everyone.
This latest profitability is very similar to my portfolio. See profitability is a very vague picture to measure the value of your equity. Patrimony does not have to have profitability, it has to generate income.
Learn one thing, if you want INCOME TO LIVE, and that is the goal of most people who invest, you NECESSARILY will die a millionaire. Your MILLION coupled with so much work, study, waiver, and frugality will be someone, to your children, wife, parents, siblings and also for the government, whatever country where you are.
There is no way, if you want to live on the income you will have to have millions in some investment yielding money. And it does not have to be in stocks, it can be in real estate, fixed income or real estate fund as well. For example, if you need $ 10 thousand to live on income will have to earn $ 20 thousand monthly passive, to earn this with real estate fund you should have at least a little more than 2.5 million reais in the fund Real estate this would yield 1% a month or less. Well, then you’ve realized you’re going to die with 2.5 million in there, right? That is the first part of my reasoning.
The second part is: imagine that your 2.5 million fell 10% in 15 days. And now they’re worth 2.25 million – OUR YOU LOST 250 THOUSAND!
DO NOT LOSE ANYTHING! You only lose if you make the sale!
Understand one thing, if you buy a stock at 80 reais and it drops to 50 reais, YOUR COMPANY PARTICIPATION IS THE SAME! Everybody has the action NOW at 50 reais, EVERYTHING, from you to the president of the company, the action is the same for everyone. The stock holder or FIES HAVE to KNOW this, FALLS are normal events, as well as HIGHS as well.
If you have 2.5 million shares and you earn 10 thousand a month clear dividend, today the stock market will go up 10% and you get 2.75 million, what are you going to do? Sell your shares? To do what with the money? Put it under the mattress? Buy more stocks, right? Because you’ve just sold, and still must have paid tax because of it. So a correct thing to do is not get upset about highs and lows in the bag.
Your equity is not measured in the value of stock quotes, that’s what people want you to think, it’s not the truth. If you have 10% of Itaú, you will have 10% of Itaú, whatever you have, what matters is that the company is doing well and paying you the dividends that you are entitled to and that makes a profit. Now look at the picture from the last 10 years comparing these indices:
Switzerland rose 44%, Brazil 34% and USA 80% in 10 years.
From here on, you realize that you can diversify in the long term in other countries to protect against the volatility of the Brazilian stock market, to protect yourself if our currency melts and also to seek a bigger growth of the portfolio and also diversify its assets abroad, It is? This will be subject to a next post.