The factors that help the “super weight”
The peso has been one of the emerging currencies that has gained the most ground against the US dollar, which has weakened due to the increase in interest rates and fears of a recession in the second half of this year.
The appreciation of the peso is also due to the fact that in November and December there was an appetite by foreign investors for local debt, according to Franklin Templeton.
As the Bank of Mexico (Banxico) stops following the Federal Reserve (Fed) in interest rate increases, the “super peso” party could be less enthusiastic since it is expected that by the end of this year, the dollar trades at more than 20 pesos.
The risks of investing in dollars
If you want to invest, you have to know that the golden rule is to diversify, so your investment portfolio must also have instruments that can give you a higher return than inflation. Franklin Templeton specialists suggest that holdings in dollars represent between 5% and 10% of the total.
In your investment strategy, you must be clear what will be the term Y destiny of those dollars. For example, if you are planning a trip abroad in the coming months, this may be a good opportunity because it will be money that you will use in the short or medium term.
But if you want to get returns in just a few weeks, you can lose out. “A person can buy dollars today and it continues to drop, then they would have a disability,” said Janneth Quiroz, Deputy Director of Economic Analysis at Monex Casa de Bolsa.
In terms of returns, the dollar has become an unattractive asset, according to Rankia. “There is a myth that investing in dollars is profitable and it is not true, the worst investment assets so far this century in Mexico are dollars,” said Edgar Arenas, author of the book “Investing and understanding.”
In addition, exchanging dollars for cash has a higher cost due to intermediation costs. Exchange centers or banks will always buy you the cheapest dollar.
How to invest in dollars?
There are two ways to invest in dollars: you can hire an investment fund or an ETF, that is, a share made up of assets such as Treasury bonds. These accounts are opened in brokerage firms and the requirements depend on each institution.
There are also platforms that allow you to invest in stablecoins or stablecoins, that replicate the behavior of the dollar.
If you choose to go buy dollars in cash, in addition to considering risks such as theft, you could only change them when the dollar is bought in an amount greater than what you bought it for.