Whenever I write about investments, I notice an almost automatic impulse on the part of readers: to quickly find out which side I'm on. Am I for or against? Is it worth it or not? Should I buy it or pass on it? The debate becomes a kind of Sunday classic, in which the important thing is to choose a team and defend it until the end. The problem is that investing doesn't work like football. There is no organized support for financial assets. There is analysis. In the past, I have written several times that, looking at the historical average, fixed income financial investments have surpassed the average return on real estate in many periods. This fact bothers those who believe that property is, by definition, the best possible investment. It also leads to a wrong belief about my possible position on the asset. For example, this weekend, in an interview with a successful entrepreneur in the real estate sector, such as Alexandre Frankel, well-structured arguments emerge in favor of the purchase. To some readers, this sounds like a contradiction. In fact, it is exactly the opposite: it is analytical coherence. Interviewing someone doesn’t automatically mean subscribing to their vision. Hearing good arguments does not oblige anyone to transform them into a universal rule. What changes is not the author's "side", if anyone thinks that exists, but the reader's repertoire. Folha Mercado Receive in your email the most important things happening in the economy; open to non-subscribers. The trap is in binary logic. When the question is "is it worth it or not?", the answer will almost always be bad. Because that's never the right question. The right question is: under what conditions, for whom, with what risks and compared to what alternatives? A property can be an excellent investment in one portfolio and a terrible deal in another. It all depends on the price paid, the location, the expected liquidity, the form of financing, the impact on the budget and, mainly, the risk-adjusted return in relation to other available applications. Ignoring these variables turns any big decision into a gamble. And, on average, this is the behavior of investors when purchasing real estate. The most common mistake I see is not buying property. It's buying property without making any calculations. Without evaluating whether the installment fits comfortably into the budget, without projecting vacancy scenarios, without considering recurring costs, confusing your desire with real demand and without comparing the potential return with financial investments of similar risk. In this context, the problem is not the product, it is the decision process. Benjamin Graham, a central reference in investment theory, said that investing is an operation based on careful analysis, which promises security of the principal and an adequate return. When this analysis does not exist, what is left is not investment, it is conviction — and conviction does not protect assets. Investors mature when they abandon the need to be "for" or "against" and begin to accept that good arguments can exist on both sides. Products are neither villains nor heroes. They are tools. And tools only make sense when used in the right place, for the right purpose. Perhaps the biggest financial evolution is not choosing the right asset, but learning to ask the right question. When this happens, the debate stops being about cheerleading and finally becomes about investment. I would like to take this opportunity to wish you a Merry Christmas. Michael Viriato and investment advisor and founding partner of Investor's House. LINK PRESENT: Did you like this text? Subscribers can access seven free accesses from any link per day. Just click the blue F below.
