The last time this happened, ordinary people became millionaires.

About this video

• Video Title: The last time this happened, ordinary people became millionaires.
• Channel: O Primo Rico
• Speakers: Thiago Nigro
• Duration: 18:30

Overview

This video explains a recurring pattern in the Brazilian stock market where individual investors tend to exit the market when interest rates are high and re-enter when rates are low, often leading to them buying high and selling low. The speaker uses historical data from 1996 to the present day to illustrate this cycle, suggesting that the current market conditions are similar to past periods that preceded significant market growth, offering an opportunity for those who understand the pattern to invest strategically.

Key takeaways

• Recurring Market Pattern: The video identifies a consistent pattern in the Brazilian stock market over the last 30 years: high interest rates cause individual investors to leave the stock market, making assets cheaper, and falling interest rates attract them back, often leading to market upswings.
• Historical Examples: This pattern is demonstrated through two past cycles:
  • 1996-2003: High Selic rates (over 25%) saw individual investor participation below 10%, followed by significant Ibovespa growth.
  • 2015-2019: After a period of rising interest rates, individual investor participation dropped to 11%, followed by the Ibovespa tripling.
• Current Market Conditions: The video highlights that currently, individual investor participation in the stock market is at its lowest point in history (10.7%), coinciding with the beginning of interest rate cuts, mirroring past opportunities.
• Risk and Reward: The speaker contrasts the predictable but lower returns of fixed income during high-interest periods with the higher potential returns (and risks) of the stock market when it is undervalued, emphasizing that those who invest before the majority return are positioned to gain the most.
• Finclass Study: A study by Finclass showed their portfolio yielding 464.5% over a 10-year period (2014-2024), significantly outperforming both the CDI (164%) and the Ibovespa (158.9%), suggesting that strategic asset selection within market cycles can lead to substantial wealth creation.