how to buy shares in pesos and earn dollars

Mercado Libre presented its quarterly balancewith results above market expectations, and exploded on Wall Street: Unicorn shares soared 16% on Thursday. The “MELI effect” it also promoted the roles of two other Argentine unicorns listed in the Big Apple:

• Globant appreciated 2.4%, to US$224
• Despegar advanced 2%, positioning itself at 7.8 dollars

Thanks to the Argentine Certificates of Deposit (CEDEAR)that represent the titles of companies listed on Wall Street, it is possible to invest with pesos and online not only to win with raises but also to shelter savings from local risk.

Such is so The CEDEARs are one of the great stars of the City: operations grew 200% last yearlargely due to the ease of acquiring these instruments.

What are the advantages of the CEDEAR?

Maximiliano Bagilet, financial adviser of TSA Bursátil, indicates to iProUP what the CEDEAR allow buy the equivalent of many major index shareslike NASDAQ or S&P, and get a relative hedging against the rise in the US bill.

In this regard, Alejandro Bianchi, founder of the consultancy firm Asesor de Inversiones, highlights that the Argentine Certificates of Deposits can be purchased with both pesos and dollars.

“Since all these shares are listed abroadr, its value, by an arbitration principle, follows the price of its dominant market in dollars, existing between both quotes a implicit exchange ratewhat is he counted with liquidation (CCL)”, emphasizes Bianchi.

In addition, Maximiliano Donzelli, Head of Research at IOL (InversiónOnline), emphasizes to iProUP that “the good thing is that you allows you to invest without having an account in the United States“.

“The low amounts required to buy CEDEAR make it possible to form a diversified portfoliowhich makes it easier to optimize the risk-return ratio”, he adds.

Regarding its profitability, Bianchi explains that the investor has three ways to earn money:

• “The first is due to a rise in the exchange rate. If it goes from $288 to $300, the stock in pesos will go up. ECequal to earth (‘if the rest remains the same’), in dollars it will have remained unchanged”
• “The second is if the stock rises in the US. In this case, equity measured in dollars will increase.”
• The third is for payment of dividends. “For example, Coca-Cola (KO) gives an annual 2.79%. So, whoever puts up $10,000 will receive $279 a year for this concept.”

CEDEAR: what can you invest in and how?

exist several Argentine platforms that allow access to the wide range of CEDEAR: you only have to transfer pesos from the bank account to buy them. It is also possible to exchange them for local currency, in case of profit taking. The exchange rate is always the spot with settlement (CCL).

Among the applications that offer this service and that are authorized by the National Securities Commission, the following stand out:

• Invest Online
• ualintec
• Bull market
• TSA Securities
• Hare
• Coconut Capital

The CEDEAR offer available could be broken down into:

• Argentine unicorns: Mercado Libre, Globant, Despegar, Satellogic and Biftarms
• Large local companies: Tenaris, Telecom, Banco Galicia, etc.
• CAPTURE: Facebook, Apple, Amazon, Netflix and Google
• Other big tech: Uber, Airbnb, Coinbase, Microstrategy, Tesla and Microsoft
• US “Classic” Giants: Ford, Coca-Cola, General Motors, United Airlines, Exxon, Walmart
• Indexes: S&P, Dow Jones (industrials) Invesco (tech), EEM (emerging), ARKK (cryptocurrencies)

Pablo Juanes Roig, co-founder and CEO of Banza, points to iProUP that these instruments grew tremendously in trading volume:

• 320% between 2020 and 2021
• 230% last year

The expert points out that “the most chosen papers by Banza users are those of Apple, Mercado Libre, Tesla, Coca-Cola, Amazon and Nvidia“.

Also, at the beginning of the year the CEDEAR of several ETFs were launched (exchange traded funds), namely, funds that follow or replicate the evolution of an indexsector or group of companies and have a double attraction:

• allow to diversifyby not being tied to the risk posed by an individual action
• They are exposed to a wide range of liquid assetssuch as indices, commodities, sectors of the economy or emerging markets

The Bull Market specialist suggests adding CEDAR countercyclical to the fall of the sector: “For example, adding to the banks, because if the rate rises they obtain benefits, while this affects technology papers due to the difficulty in obtaining financing”.

His colleague from TSA Bursátil adds the papers of Petrobras (PBR), Vale (VALE), Bioceres (BIOX) and SHELL (SHEL)in addition to Barrick (GOLD) and Coca-Cola (KO). “In addition, for the construction of portfolios, we closely follow the energy, mass consumption and some agricultural items, given the current price of commodities,” adds Bagilet.

Finally, for investors who consider having an aggressive profile, IOL suggests taking into account “the challenging scenario in which the american financial market” Y try to mimic the ive stock exchange traded fund.

“Between the CEDAR that are needed to replicate it in the local market, an investor should have Pepsico (PEP), Disney (DISN), Berkshire Hathaway (BRKB), and UnitedHealth (UNH)“, indicates.

Is it a good time to invest in bigtech?

The shares of the main technology companies are far from extraordinary returns registered during the first two years of the pandemic, a situation that can lead many savers to dilemma about whether it is a good time to add to their investment portfolios.

Bagilet and Donzelli propose stay cautious given the current volatility scenario, since they still expect an additional low in the innovation sector.

“If the goal is to start building a long-term portfolio incorporating low percentages, it is convenient favor shares of companies with solids fundamentals and that they have enough waist to overcome eventualities market and even short term financingDonzelli stresses.

Bianchi adds that “there is a large deleveraging as a result of the tightening of the Fed’s monetary policy.” That is to say, the actors no longer take credits to advance in investment projects.

In his vision, for an aggressive profile protector, there are good opportunities. “We are in a hinge momentwhere cryptocurrencies and the blockchain will generate a great change in the digital economy. So to speak, during this market correction, it may be possible to buy the next Google of Web3 at discount prices“, Explain.

Thus, Argentines bet on CEDEARs because they allow them to invest in pesos and maintain the investment at CCL value, protecting themselves from two issues that keep them awake: inflation and devaluation of the peso.