Investments: certain of “uncertainty” and/or “change”

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To speak of uncertainty and/or change in investments is a euphemism that softens the naked reality of subjectivity (a sense of illusory denial). If not, let us think about when: i) does investing involve uncertainty?; ii) isn’t change the only constant in life? Heraclitus of Ephesus referred to it; it is such that the euphemism itself has become another. Therefore, it is to assume it as something inherent and positive! Investments: the certainty of “uncertainty” and/or “change”.

Obviously, this does not invalidate being aware of decisions, being more attentive in atypical economic contexts. Being the correct word “conscience”, how to deal with emotions in decision making? This influence, known as behavioural finance, demonstrates that traditional analyses do not result in moments of panic/euphoria. And, the emotional cycle, identifiable a posteriori, is not easily recognized in these moments. Hence expressions such as: “this crisis is different” or “nothing will ever be the same again” are wrong!

It is enough to go back 20 years in history to obtain atypical examples: i) 2007/2008 subprime crisis; ii) September 11, 2001 terrorist attacks; iii) the dot.com bubble. Therefore, regardless of the type of investment, the strategy is to have a long-term rather than a short attitude because: i) the drop in remuneration allows the sale to minimize the risk of additional losses; ii) increases risk exposure; however, it is the right time to invest (recovery in the recovery). This attitude generates additional gains due to: i) the transfer of risk; ii) the longest return gap; iii) losses can be beneficial (the company’s tax and accounting strategy). In short, those who do not give in to pressure reinforce the option!

But where to invest? For the European Commission (EC): i) 45% of the Gross Domestic Product (GDP) illustrates foreign investment; ii) 30% -50% of the research is via interim investment. And in October 2020, Ernest & Young interviewed 109 executives globally from 14 sectors of activity and concluded that: i) foreign investment will decrease by 2021 (difficulty in evaluating and carrying out projects); ii) European attractiveness for three years has greatly improved; iii) 3-year binary decisions are expected (volatile fluctuations versus normality); iv) digitization under the aegis of radical transformation of processes; v) sustainability and social responsibility initiatives.