Fixed income investment above inflation

Is fixed income investment above inflation possible?

---

Are you looking to make financial investments, but don't know the options for investing in fixed income above inflation?

Fortunately, it is possible to make your money yield more than inflation. But to do so, you need to diversify your portfolio and find the right investments.

The traditional savings account, for example, despite being a safe investment, offers very low returns, which affects your purchasing power, especially in the long term.

To help you, we will show you good fixed income investment options above inflation! Continue reading for more information.

What is inflation?

Inflation is an economic process characterized by a widespread and persistent increase in the prices of goods and services.

In other words, it represents an increase in the cost of living and a reduction in the purchasing power of the currency.

A simple way to understand the consequences of inflation is to go to the supermarket. Prices are not the same as they were 5, 10 or 15 years ago. Nowadays, everything is more expensive.

Additionally, inflation also has a significant impact on the value of larger items such as rent and cars.

---

How does inflation impact investments?

To understand the relationship between inflation and investments, it is necessary to know the difference between real profitability and nominal profitability.

Real profitability refers to income after deducting taxes, costs and inflation.

Nominal profitability is the total return on the investment and can be calculated for the entire duration of the investment or just for a specific period.

Knowing the real profitability of your investment is essential to understanding whether it is actually performing well.

In other words, when you analyze real profitability, you can accurately measure the performance achieved. This way, it will be easier to make financial plans and know whether the assets are really worth the investment.

But after all, how can you prevent your investment income from being lost to inflation? That’s what you’re going to see now!

---

Fixed income investment above inflation: what are the main ones?

If you want to protect your money and maintain your purchasing power, it is important to invest in applications with good profitability.

With that in mind, I'd like to show you some fixed income investment options above inflation:

1. IPCA Treasury

The IPCA Treasury is a fixed income security issued by the government.

Its profitability is linked to the main inflation index in Brazil, the IPCA – Broad National Consumer Price Index.

Basically, when you buy a Treasury Direct bond, you are lending your money to the government.

You will receive the money again on a specific future date, adjusted by an interest rate, which corresponds to your profitability.

The IPCA Treasury is a good option to prevent your money from depreciating over time. After all, the same R$ 100 today buys less than it did 5 years ago.

Investing in the IPCA Treasury or any other Treasury Direct bond is very simple. Another advantage of this investment is the minimum amount.

With just over R$ 30, you can already make investments in the IPCA Treasury.

---

2. CBD

CDB (Bank Deposit Certificate) is a fixed income security issued by banks to raise money and finance their activities.

As you can see, the logic is the same as in Tesouro Direto.

The difference is that in Tesouro Direto the money is loaned to the Federal Government, while in CDB, the loan is made to financial institutions.

Banks raise money with the CDB and in exchange, offer remuneration.

Regarding the profitability of this investment, it is important to know that there are several types of CDB and each one has a very particular characteristic.

Generally, returns are based on the Interbank Deposit Certificate (CDI) rate.

But today, on the market, there are already options that pay according to inflation, in a similar way to IPCA Treasury bonds.

---

3. LCI and LCA

Real Estate Credit Letters (LCI) and Agribusiness Credit Letters (LCA) are other types of fixed income investments.

From the investor's point of view, there is no difference between investing in LCI or LCA, as what changes is the security behind the paper.

Real estate credit letters are backed by the loan portfolio related to the real estate sector, while LCAs are aimed at the agribusiness sector.

The main advantage of this type of investment is the exemption from Income Tax.

There are options with returns linked to inflation, the problem is that in this case, they usually require larger investments.

The recommendation is to look for bonds from smaller institutions, which often offer more attractive returns for small investors.

---

4. Debentures

A debenture is a debt security issued by companies that offers credit rights to the investor.

Its operation is similar to that of public bonds traded on Tesouro Direto.

But the difference is that whoever buys debentures is lending money to a company that wants to expand operations or make any other investment.

Bonds generally have a longer maturity. The remuneration model is similar to that of the Treasury IPCA.

As they are riskier investments, debentures usually offer a higher return. However, they require more attention and a more detailed risk assessment.

It is important to remember that debentures are not covered by the FGC (Credit Guarantee Fund).

---

Fixed income investment above inflation: how to choose a good investment?

It is very important to know what your investor profile is, so that you can choose the investments that best suit your preferences and needs.

It is also necessary to set clear goals, assess the risk-return relationship and the real return on investments.

Conclusion

Now you know the importance of investing in fixed income above inflation.

After all, inflation eats away at your money and, especially in the long term, it reduces your purchasing power.

To maximize gains and minimize risks, it is necessary to diversify your portfolio and keep an eye on the main market trends and projections.