Ibovespa drops almost 20 percent and triggers circuit breaker after second round
historical survey by btg shows that the Brazilian stock market usually recovers its momentum twelve months after the panic
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM SEU DINHEIRO · 2 MIN
Political and economic instability once again punished the Brazilian stock market drastically. As the vehicle Seu Dinheiro found, the Ibovespa plummeted almost 20% after the second round of elections, a severe devaluation movement that scared operators.
The selling force was so intense that B3 had to activate the circuit breaker, a security mechanism used to paralyze business in moments of widespread decline and extreme volatility. This type of drastic event usually marks moments of panic in variable income, generating deep doubts about capital allocation.
To try to understand the consequences of this scenario on prices, BTG prepared a historical survey on the performance of the Ibovespa after the circuit breaker was activated, according to Seu Dinheiro. The study sought to map the behavior of assets and the dynamics of stock market recovery in past crises.
The analysis brought a glimmer of relief to those operating on the long side. According to data released by Seu Dinheiro, Ibovespa showed recovery in all 12-month periods following a historic circuit breaker.
What changes for the investor
The historical survey highlights the relevance of maintaining discipline in times of strong stress on the stock market. The finding that the index recovered in all horizons of one year after the circuit breaker provides quantitative data for the strategic planning of managers and investors focused on the medium and long term, although the study reinforces that the careful selection of assets makes all the difference in capturing this movement.
Automatically translated from Portuguese.
