What to invest in in 2023 given the high volatility of the dollar

In the midst of an uncertain environment, marked by the high volatility of the dollar in the local market and without a clear perspective on the future, the question arises about What to invest in in 2023.

(Dollar volatility continues: currency is back above $4,800.)

And it is that for now the direction that the price of the dollar can take in Colombia is not so clear, taking into account the economic factors that impact its price in the short term, and that cloud the projections about what can happen with it.

For Diego Franco, president of Franco Group SA and head of investment at Franco Capital Management, the outlook for the dollar in 2023 is tied to inflation.

“If inflation subsides, in the second part of the year, as forecasts have indicated, and similarly, monetary policy for emerging markets declines as a result of more moderate inflation, I would believe that the dollar would also subside in emerging markets. like Colombia”, noted the expert.

(Will the price of the dollar continue to fall? This would happen in the coming weeks).

Under this scenario and taking into account that the dollar is one of the most traded investments and that its price can affect other bets, Franco believes that it is best to resort to hybrid portfolios that combine fixed-income shares, corporate bonds, and even CDTs. , “That before was not an instrument of value or profitability, but that today, due to the disorder that exists, they also fit into a portfolio of alternatives.”

According to Franco, what to invest in will be a question resolved by each investor, according to their profile, “But let’s say that, generally speaking, someone with a moderate and aggressive profile could go buying emerging market stocks.”

For the expert, in general terms, in emerging markets there is a lot of future profitability.

(Peso vs. dollar: Colombian currency was revalued by $161.50 in January).

“I think that in emerging markets the punishment in some niches has been excessive and that will soon change, and I think that for someone with notions of value, patience and capital, they would have good future results in these markets”he concludes.

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