Two-thirds of Investors Change Their Ways Due to Coronavirus Crisis, According to Research

RIO DE JANEIRO, BRAZIL – With the sharp increase in market volatility after Carnaval, most investors chose to take a different approach to what had been practiced until then.

However, this does not imply that the shift was only towards more conservative assets in the name of high risk aversion.

A survey conducted by the Leadr social media, in partnership with the Píon data intelligence agency, shows that 68 percent of investors changed their way of acting in the market after the crisis erupted.

Half of them in fact adopted a more cautious stance, but the other half chose a bolder approach. The survey was conducted between March 31st and April 1st and heard 1,027 social media users.

Of the total number of respondents, 78 percent invested in March, with a high preference for variable income assets, which accounted for 74 percent of investments, followed by fixed income assets for 12 percent. Among those who invested in recent weeks, 43 percent increased their investment and began to allocate more money than before the crisis, while 27 percent slowed their pace.

Meanwhile, of the 22 percent of respondents who did not invest in the past 30 days, but who made some investment over 2020, 84 percent pointed to the coronavirus as a major impact in the decision not to invest last month.

Regarding the investment outlook, the majority (42 percent) expressed a long-term view, with the expectation of redemption only in periods longer than five years. A total of 34 percent intends to redeem within two years and 24 percent between two and five years.

Perspectives on COVID-19

In addition, the survey showed that the general perception of respondents is that the pandemic will be more severe in Brazil than in other countries – 79 percent of respondents said they were pessimistic about the country’s finances, against 71 percent who showed concern about international finances.

As for personal finances, optimism is somewhat higher, with 43 percent expecting only moderate impacts on their homes.

Regarding the length of the pandemic and its effects on the economy, 35 percent said they work with deadlines of one to two years for local activity. Overall, the majority of respondents (42 percent) point to impacts of COVID-19 lasting six months to a year.

The Leadr/Píon study also showed that, according to the participants’ assessment, the most intense economic impacts due to the virus should be focused on micro and small-scale companies. As the size of the company increases, the smaller (in relative terms) the impact, the research points out.

Finally, among the priority measures that the State should implement, three contributions stood out, each with approximately 27 percent – structural reforms; credit to companies; and worker income protection.

Only 11 percent of respondents were in favor of relaxing social isolation measures. Another six percent advocated an increase in public spending.