The market is scared, and I understand why: interest rates, inflation, the dollar, and oil prices are all climbing at the same time, and anyone invested in Brazilian real estate funds (FIIs) watches their portfolio show losses day after day. But I lived through this same movie during Lula's previous presidential election, and it did not end the way the pessimists predicted. In this piece, which covers everything I discussed in the video, I explain why I believe it is not the time to panic, what I am currently doing with the channel's portfolio (buying more FIIs, particularly TRXF11 and TGAR11), and why TGAR11—which has dropped about 66% in a year—has become my main case study.
Watch the full video in the player above or read the organized version below. Everything here represents my opinion and a description of what I am doing with my own money. This is not investment advice.
Today's Fear Has Happened Before
I am concerned—I won't pretend otherwise. The market has dropped significantly since Lula was elected. But I remember the last time he was elected quite well: my feeling back then was that Brazil would sink for good and everything would go downhill.
And what actually happened? Over the next four years, things leveled out, and in the end, nothing quite as terrible as feared came to pass. The country performed relatively well compared to my expectations. It wasn't stellar: the public debt continued to worsen. But the market kept functioning and even experienced moments of euphoria.
I see many people falling into that same anxiety now, and I understand why the entire market is pessimistic. The outlook doesn't look good: rising forward interest rates, high yields on Tesouro Direto, and climbing inflation, dollar, and oil prices, with the end of subsidies on the horizon. Indeed, that is what is happening. But you can be sure that before long, these headlines and this narrative will start to soften. The market overreacts.
Why I Wasn't Optimistic (And When Other Assets Will Have Their Turn)
Why does the market overreact? Because all this pessimism it is pricing in right now was already apparent to me at the start of the year. That is why I wasn't overly optimistic. Just look at the channel's exposure portfolio: 0% optimism in gold, 0% in Bitcoin.
Bitcoin is a good example. Before long, from around $70,000 today, it could drop to $40,000, and everyone will say Bitcoin is useless, that it's going to get hacked, that it's finished. Someone will tell me, "Edinei, it's not going to drop to 40." Relax, its time hasn't come yet. You have to harvest forecasts of what will happen before they actually happen. Bitcoin's turn will still arrive: that will be the moment to buy the fear, and I'll make a video about it when it does.
In this video, the focus is different: today is the moment to buy real estate funds. It has been a long time since I felt optimistic about FIIs. Today, I am growing extremely optimistic because the market, unfortunately, does not know how to price things based on their real value.
Cheap Is Cheap, Expensive Is Expensive
I was heavily positioned in the U.S. dollar because having the dollar at R$ 5 was absurd. I bought a lot of dollars; practically speaking, I was entirely short on the dollar. The channel's exposure portfolio reflected that as well, because it mirrors my general thinking.
When Lula won, our portfolio held steady and even posted a profit, while the Ibovespa and the IFIX tumbled. Why? Because our view is simple: what is cheap and what is expensive. Everything else is market narrative, and the market changes its narrative very quickly.
The Narrative Changes Fast
We are near the end of the year, and this narrative is likely to persist for a bit longer. Once the year turns, everyone returns with renewed energy and fresh topics. The government might face some influence from the United States and change course; or, even if that doesn't happen, it could present solid proposals and appoint someone capable to head the economy. The narrative could flip entirely. And when it flips, the entire market surges.
Those who bought right now, while everyone was pricing in the worst-case scenario, will start to reap the rewards.
Brazil Isn't Going to Collapse Out of Nowhere
"Oh, but Brazil has no way to recover." Calm down. We have Petrobras, Vale, soybeans, rice, and the entire agribusiness sector. We produce these goods and export them. The more expensive the dollar, the more Brazil gains from foreign sales. We are living through a favorable commodity cycle, which means the country will export heavily. When exports are strong, the dollar stabilizes; and with a stable dollar, inflation stays in check.
Oil is expensive, but we can manage it because we have domestic production. So take a deep breath: Brazil is not going to collapse out of nowhere. Take advantage of the shock, embrace the fear, and start building positions in the assets you consider cheap.
What I Am Doing Right Now
In the channel's portfolio, FII exposure sat at 40% at the time of recording, and I had already recorded an increase to 50% (though the screen hadn't updated yet). I am buying another 5% in TRXF11 and another 5% in TGAR11. This adjustment follows the portfolio rule: trades are only executed while the market is open, and the new allocation is available in the recommended portfolio.
I am frustrated with this market because it forces me to increase my position in these two specific assets when I wanted to diversify further. It's just that the other assets aren't dropping as much, while these two are taking a severe beating, falling heavily, heavily, heavily. It is precisely this excess—the unjustified decline—that is the central point of this video.
An important detail regarding the credibility of these numbers: the channel's portfolio is tracked and recorded on the Bitcoin blockchain. There is no way to alter past history: what is done is done, and the exposure portfolio cannot be manipulated. All the performance we show is genuine.
TGAR11: A 66% Drop in One Year
TGAR11 is trading at R$ 31. A year ago, it traded at R$ 92—that is roughly a 66% decline. It is an astronomical drop.
I used to hold units and sold all of them near the top. I bought a little, sold again; bought another time, sold again, right at that peak. When it dropped, I started buying again and continue buying to this day because I believe the market is far too pessimistic.
The fund's price-to-book ratio (P/BV) stands at 0.29. Imagine that: an asset worth R$ 100 on paper that you can buy for R$ 29. (The net asset value per unit from the September monthly report, R$ 107.80, yields that ratio.)
"Ah, but that's because the dividend decreased." I understand; it is terribly frustrating. But when the dividend drops and the unit price plunges right along with it, that's an overreaction. And, forgive me for saying so, anyone who doesn't know how to invest in a situation like this is someone who shouldn't be selling. If you buy something and panic-sell the moment the dividend drops, the first thing is that you shouldn't be investing in this type of asset. You belong in fixed income.
The Lesson of the Rice Farm
I come from a rice farming background. My father planted rice his entire life and today has acquired several plots of land. Looking at his history, I think about how wealthy he could be if he lived in today's world.
In rice farming, one year you plant and make a lot of money; the next year, you plant and lose. You work all year, make nothing, and actually lose money. Even so, when you go to buy a piece of land to expand the farm, it isn't cheap: it costs the exact same price as when the market was booming. Farmland prices work like this: in a good year, prices go up; in a bad year, prices hold steady; in another bad year, they hold steady; in a good year, they go up. They never go down.
Why? Because the moment prices dip, anyone who had a successful harvest saves their money to buy when people are willing to sell cheaper. It's a market where an entire year can yield a loss and nobody sells.
With real estate funds, it's the exact opposite. A fund manager announces a dividend cut—which may or may not be temporary—and people rush to sell at a price where the annualized yield sits at 1.48% a month. Good grief, earning 1.5%! My father always used to say, "if it yields more than 1%, you're running the risk of a scam." That would certainly fit the scam risk profile. Except this isn't one.
You are investing in an asset with various subdivisions and developments that aren't performing well right now and aren't in a great sales window, but which tend to improve toward the end of the year. Even with a grim outlook for forward interest rates and an uninspiring forecast ahead, there is a two-to-three-month period that should perform better. And if the fund is legally required to distribute 95% of its earnings, it will have to pay out an extra amount. When that additional payout happens, will the unit price soar? Is the market really inefficient enough in its pricing to make that happen?
The Fair Value: R$ 42.80 (and ~R$ 37 in the Worst Case)
The fair value calculated by the platform for TGAR11 at the time of recording was R$ 42.80. The historical P/BV pointed to about R$ 83, and the required yield already hovered around R$ 36, a lower figure. Using a discounted cash flow model spanning five years plus perpetuity, under today's dismal conditions, the math already looks crazy. One would expect things to improve in the future, which would push the fair value well above R$ 37. But even assuming the fund continues through this rough patch, R$ 37 would still be the fair value.
You can see just how poorly the market is pricing this asset right now. It's madness, and it forces us to increase our exposure to this type of asset and become heavily concentrated. But that's fine: I've done this many times in my life, and rarely has it gone wrong or left me with regrets. It could go wrong here, too. I am using one specific asset as an example simply to show that the market is overreacting and that you need to seize the moment without fear.
The fund's numbers and the full analysis are available on the TGAR11 page; TRXF11 also has its analysis published on the site.
What If It Drops Further?
You might buy tomorrow, have the dividend drop to R$ 0.30, and see the unit price fall to R$ 20. It's possible. If that happens, use the opportunity to increase your position further, or re-evaluate your thesis to verify whether anything fundamental changed in the fund or if something is genuinely broken. If nothing is wrong, simply take advantage of it.
The Bottom Line: It Is Not the Time to Panic
I don't usually make YouTube videos, but I felt the market is entering a phase where I needed to step in and say: this is not the time to be scared; it's the time to buy assets.
I am very excited. My portfolio was practically cleared out of FIIs and several other assets, and now it is shifting: I am holding roughly 25% to 30% in Brazilian assets, up from almost zero not long ago. And I am building that position gradually, without rush and without the fear of missing out. If forward interest rates drop, a different narrative emerges, or there is a change in government, these funds will take off, and then it's smooth sailing. Pity those who sold at the bottom and missed out. We don't know how long this phase will last—whether one year or four—but you have to think about the future and position yourself accordingly.
To be entirely clear: this is not investment advice; this is where I am allocating my own capital. Trust primarily what you are buying and your own strategy. If you doubt what you are doing, you will end up making bad trades. Buy with conviction, let your brokerage screens show losses, and keep buying until you reach the point where you only see profits day after day. Once the profits arrive, you harvest them.
Planting Means Expenses
We are in the planting season, and planting means expenses. Planting means looking at losses: you put money in today so that one day it will grow and be harvested. The feeling is mixed. With everything I've ever bought, I only see losses day after day. But at the same time, the market gives me more and more opportunities to buy cheaper what I was already willing to pay more for.
Diversification and Cash Reserves
The channel's portfolio didn't surge, but it didn't collapse either. We underperformed the CDI, but nearly everything underperformed the CDI this year. It held steady because it is diversified and controlled: the goal isn't to score massive gains, but rather to avoid severe losses.
Buying heavily into real estate funds while waiting for a rebound doesn't mean prices can't fall further. That's why I didn't deploy everything and still hold healthy cash reserves. If more opportunities arise, I'll buy more; if they don't, that's fine too—cash yields well right now, and I'll still capture the upside when real estate funds recover, so everything is under control.
The Market Is Cyclic
Before long the narrative flips, and then it flips back again. It's cyclical: one minute it goes up, the next it goes down. Just look at the Ibovespa this year alone: it went up, down, up, and down. A lot can change in a year, and market sentiment shifts repeatedly.
I wanted to share these thoughts with everyone. I hope it serves as support—more than inspiration—for anyone going through these tough times, just as we are experiencing them ourselves. A warm hug to all of you, and God bless.
Important Notice
This piece summarizes the video published on Nov 11, 2026 and reflects Edinei Bauer's personal opinion and channel portfolio allocations. It is not investment advice. Real estate funds, including TGAR11 and TRXF11, carry capital loss risks, and distributions can decline. The quoted prices and fair values reflect the moment of recording and change over time; please check current data on each fund's dedicated page.
