Unveiling the World of Investments

A Complete Guide for Beginners

What Are Investments?

Investing is allocating resources (money, time, or effort) with the expectation of obtaining future returns. You give up something in the present to reap greater rewards in the future.

Inflation: Your Silent Enemy

Inflation erodes purchasing power over time, making the same monetary value buy less and less.

Practical example: If you invest $1,000 today and inflation is 5% per year, next year your $1,000 will only be worth $950 in terms of purchasing power.

In Brazil, average historical inflation hovers around 6-8% per year. That’s why it’s crucial to seek investments that outpace inflation to protect your wealth.

Finding Good Opportunities

Define Your Goals

Before investing, establish clear goals and understand your risk tolerance. Each person has a different profile.

My Personal Experience

I’ve been investing for over 13 years and have weathered various crises: the Dilma government, Temer, Brumadinho, and COVID-19. I prefer to study deeply and concentrate capital on opportunities I believe in, rather than diversifying excessively.

Windows of Opportunity

When to Invest

• Market declining + dollar rising (or vice versa)
• High fear index (VIX) – when everyone sells in panic
• Scarcity assets – gold, silver, oil maintain value over time
• Investment in yourself – if you have little capital, focus on increasing your income

Precision in Investing

Forget guru courses and miracle strategies. When it comes to your money, you need something solid with a scientific basis. Look for quantitatively tested strategies – they have a higher probability of working than those that only worked for a short period.

Warren Buffett’s Island Test

Warren Buffett has an infallible test: imagine you’re stranded on a desert island for 20 years and can only invest in a single company. Which would it be?

This reflection helps identify solid companies with competitive advantages and sustainable business models.

Fundamental Principles

Long-Term Mindset

Investing is a marathon, not a sprint. Have patience, discipline, and focus on long-term goals.

Essential Tips

• Invest in yourself first – you are your greatest asset. Increase your ability to earn more to contribute more
• Focus on time, not rate – time is exponential, rate is not. Stay invested for as many years as possible
• Theory vs. Practice – “There’s a big difference between knowing the path and walking the path.” Read, listen, and test

First Steps

Many people are afraid to take the first step. Start small: put in $100 and test. Practical experience is fundamental to discovering what works for you and what makes you comfortable.

Conclusion

Investing is a journey of learning and patience. You’ll have to test many strategies until you discover what works for your profile. But don’t be intimidated – start your journey as soon as possible.

With time and the right strategy, you can achieve the much-dreamed financial freedom.