Investment in COVID-19 crisis?

Ricardo Gallo, general manager of Inandes Grupo Financiero, a factoring and management company of private investment funds, comments that the investment tool to choose must be adjusted to the liquidity that it expects to receive, to profitability and, above all, to tolerance to risk you are willing to take. ” Any investment alternative not only has a return on profit, but also a risk. This is very important to evaluate, given that financial products are always offered with their best numbers, but the opposite could happen ”, he assures.

It emphasizes that investing in something that is not known is not the best option, because understanding is the basis for having a better awareness of the terms, and if the product to be invested in is well known, it is better to concentrate than to diversify. ” Not always having the eggs in different baskets ends up being the most successful, ” he says.

Remember, also, that investment accounts do not have a deposit fund insurance (as in savings deposits) so that no supervised or unsupervised institution will return the lost money, if applicable.

INVESTMENT ABROAD

At the beginning of the pandemic, many looked favorably on investment options abroad, given the sharp fall in world stock markets.

Gallo advises that many of these alternatives like investing in US Government bonds ; in shares of companies in the stock exchanges of the same country, individually or through mutual funds; in properties or in derivative products based on the prices of raw materials are tied to the incentive programs being implemented by the United States and the European Union, which would allow a rapid recovery of the economy.

LOCAL OPTIONS

Among the local options, he details that there are traditional investments such as taking refuge in the dollar . Although this is a fluctuating currency, the Central Reserve Bank always sees fit to intervene in the market and smooth out fluctuations in the exchange rate.

Other possibilities are term deposits , which although they have a coverage by the FDS of up to S / 100,058 (until August 2020), the disadvantage is that the interest rates are very low (even for products of 3 years of term). ” Today with the Reactiva Peru loan program, financial entities are very liquid and we have to see if they will be able to place all that money to know if rates will improve or not, ” explains Gallo.

The Lima Stock Exchange is also an alternative to take advantage of the fall in the markets. However, it is a not very liquid market (few transactions and focused on three or four companies) and not very deep. In addition there are also mutual funds and public investment funds.

ALTERNATIVE PRODUCTS

On the other hand, he comments that there are also alternative investment products such as private investment funds; fintech and private loans.

Unlike public investment funds , it details that many of the existing private funds do target people to facilitate the investment process in a given business. For example, a large percentage of factoring companies finance their operations through this instrument, allowing people to access this type of financing. “As the Government opens opportunities, such as those proposed in Emergency Decree 013-2020, investment instruments can be organized tailored to investors and directly supporting companies, ” he says.

He assures that today this modality is used to finance, in addition to the aforementioned factoring operations, the construction of real estate, financing the purchase of assets, among others.

“ The investment through this instrument facilitates the withholding of the Income Tax and facilitates the investment process for people than if a figure such as the mutual contract were used. This instrument is formal (because it has a different RUC, accounting and accounts) although the Superintendency of the Securities Market does not currently supervise it, ”he says.

In the case of the fintech modality, it refers that it has to do with technological developments that facilitate investment in some type of financing for people or companies. “Although the technology allows an improvement of the processes, the concept behind is that the investor finances directly,” he says.

Finally, private loans are the oldest alternative investment operation that we have available and implies that the person who invests or lends the capital directly assumes all the risks of the operation. In this sense, there is a market of professional providers of this type of resources. It advises that this type of operation be accompanied by a contract and the constitution of guarantees for the protection of capital.