International Investments: How to Protect Your Money from Currency Volatility

1. Understand the Benefits of International Diversification

Investing outside Brazil offers important advantages. In addition to mitigating local market-specific risks, such as political or economic crises, an internationally diversified portfolio allows:

• Access sectors and companies unavailable in Brazil.

• Take advantage of the growth of emerging or developed markets.

• Protect yourself from sharp devaluations of the real.

For example, investing in shares of North American technology companies or in funds that track global indices can offer greater exposure to innovation and growth.

2. Use Investment Vehicles that Reduce Currency Risk

A common concern when investing abroad is the impact of currency volatility on returns. To minimize this risk, consider the following options:

• ETFs and Currency Protected Funds: Some funds offer protection against currency fluctuations, ensuring more predictability.

• Brazilian Shares and ETFs with International Exposure: Companies listed on B3 that have a large part of their revenue in dollars (such as exporters) can act as a natural hedge.

• Futures Contracts or Exchange Options: Derivative tools that help lock in the value of currencies, mitigating the impacts of exchange rate volatility.

3. Diversify Across Asset Classes

Diversification is not just geographic, but must also include different types of assets. Consider:

• International Fixed Income: Bonds issued by foreign governments or companies offer greater security in times of uncertainty.

• Foreign Shares: Leading companies in their sectors can generate significant returns in the long term.

• REITs (Real Estate Investment Trusts): Investing in global real estate funds gives you exposure to the property market in the US, Europe and Asia.

• Commodities: Assets such as gold or oil have a negative correlation with local currencies and can act as a hedge against currency crises.

4. Plan for the Long Term and Avoid Speculation

When investing internationally, it is essential to have a long-term perspective. Short-term currency movements can be volatile and unpredictable, but over time, they tend to stabilize. Avoid currency speculation and focus on consistent investments that are aligned with your financial objectives.

5. Choose Reliable Platforms and Brokers

To access international markets, use reliable brokers with a good reputation. Some Brazilian platforms already offer access to assets abroad, while foreign brokers can also be a viable option. Be sure to consider costs such as brokerage fees, foreign exchange and taxes.

6. Be Aware of Taxation

International investments are subject to specific tax rules. For example, profits from investments abroad generally need to be declared to the IRS. Consult an accountant or tax specialist to ensure compliance and avoid surprises.

Conclusion

Investing in international assets is an excellent way to diversify your portfolio and protect your assets from exchange rate volatility. By adopting a well-planned strategy, using hedging tools, diversification between assets and secure platforms, you can minimize risks and take advantage of the vast opportunities that the global market offers. With planning and knowledge, your money will be safer and prepared for the future.