- Direct shift: We zeroed out our 5% position in Tesouro IPCA+ (Renda+ 2065) and reallocated the entire amount to cash.
- New cash level: Liquidity rises from 30% to 35% of the total portfolio, yielding 14% a year at the Selic rate.
- Transparency: The decision was made on October 27 and recorded retroactively with a market close of October 26 (at an IPCA+ rate of 6.75%).
In our previous article, published right after the October 26, 2026 elections, we stated categorically that we would make no adjustments to our model portfolio. However, after evaluating rate dynamics during that same day's trading session, we changed our minds. We are not ashamed to reverse course when we determine that the risk-reward scenario has shifted.
Why Did We Change Our Minds About the Portfolio?
We reassessed fiscal risk and the intraday swings of Tesouro Direto yields. The market open on October 26 brought very long-term IPCA+ bonds trading near IPCA+ 7.4% a year, but the session closed with a sharp drop in yields, returning to the IPCA+ 6.75% range. We concluded that this closing yield does not compensate for the accumulated fiscal risk over a nearly 40-year horizon, leading our team to prefer the safety of cash yielding 14% a year.
Deciding not to make changes is a daily choice, but holding onto a bad position out of pride is a mistake. When we published our initial analysis, our plan was to leave the allocation untouched. The behavior of the October 26 trading session, however, opened a window to exit a highly volatile bond without suffering heavy mark-to-market losses at the close.
What Changed in Our Portfolio Allocation
The adjustment was surgical: out went long-term inflation-linked fixed income, and in came floating-rate cash. The table below summarizes our exact asset allocation by class as of October 26, 2026.
| Asset Class / Sector | Previous Allocation | New Allocation | Outlook / Status |
|---|---|---|---|
| Cash (Floating Rate) | 30% | 35% | Bullish |
| U.S. Dollar (Currency) | 25% | 25% | Bullish |
| TLT (U.S. Treasuries) | 15% | 15% | Neutral |
| FIIs (Real Estate Funds) | 10% | 10% | Neutral |
| Auction Real Estate | 10% | 10% | Neutral |
| Ibovespa (Brazilian Stocks) | 5% | 5% | Bearish |
| Tesouro IPCA+ | 5% | 0% | Bearish |
| Gold, S&P 500, Bitcoin | 0% | 0% | Out of Portfolio |
Everything else in the structure remains locked at 100%. The only physical movement of capital was the complete transfer of the 5 percentage points previously held in Tesouro IPCA+ directly into the cash category.
What Was the Bond and How Does Mark-to-Market Work?
The bond we sold was Tesouro Renda+ 2065, our fixed-income holding with the longest maturity. For retail investors, it is crucial to understand that long-term inflation-linked government bonds trade almost like stocks on brokerage platforms due to a mechanism known as mark-to-market accounting.
Mark-to-market adjusts the value of a bond daily. If the rate negotiated by the government goes up, the price of the security already in your account drops to match the yield of newly issued bonds. The more distant the maturity date (such as 2065), the higher the price sensitivity to any 0.10 percentage point shift in interest rates. This is what the market calls high duration.
When bond yields fall, the reverse happens: the face value of the security rises quickly. It was precisely this intraday movement on October 26 that caught our attention and accelerated our decision-making.
Why We Decided to Sell Tesouro IPCA+ Now
The October 26, 2026 trading session was marked by extreme volatility in Tesouro Direto. At the opening bell, Tesouro Renda+ 2065 traded near IPCA+ 7.4% a year. Throughout the day, however, strong buying relief drove yields down, closing the session around IPCA+ 6.75% a year.
In our view, an IPCA+ yield of 6.75% for a nearly 40-year horizon is insufficient given Brazil's fiscal risk. We do not see an attractive outlook for this paper, neither in the short term—with the Selic rate maintained at a high 14% a year—nor over the long term, given that the risk premium compressed far too quickly in a single trading session.
We prefer not to carry that uncertainty. Selling the bond in the IPCA+ 6.75% range allowed us to capture the closing price relief and remove an asset from the portfolio that would generate severe turbulence without delivering adequate real returns.
How the Record Was Made and Why It Is Retroactive
Honesty with our readers is the cornerstone of Rico aos Poucos. We made the actual decision to zero out our position on October 27, 2026. However, for portfolio pricing purposes, we used the asset's value at the market close of the previous day, October 26, 2026, when the bond settled at an approximate rate of IPCA+ 6.75%.
Our public log entry (record 0008 in the Transparency section) was posted on October 27, but is marked as "backdated" to the October 26 market close. We make no secret of the gap between our analysis and the timestamp of the record: the technical proof date of the entry is October 27.
Timing inconsistencies happen in real-world portfolio management, and we make a point of documenting them. When checking our transparency page, readers will clearly see the explanatory note demonstrating why the valuation price was backdated to the close of the October 26 trading session.
What Did NOT Change in Our Positions
Despite the move out of Tesouro IPCA+, our other positions remain in the exact same strategic proportions. Dollar-denominated assets (U.S. currency at 25% and the TLT ETF at 15%) experienced recent appreciation and now account for a larger share of our total wealth.
Rose in relative value. We are considering trimming a fraction into cash, but with no rush.
Maintained at 10% each. Monthly income and physical assets protect the foundation.
Bearish outlook maintained. Minimal exposure to Brazilian equities.
We are still evaluating whether it is worth taking partial profits on the U.S. Dollar and TLT to further reinforce our cash position. If it makes sense, we will execute without panic in the coming months, maintaining our rebalancing discipline.
What a 14% Selic Rate Does for Our 35% Cash Position
Keeping 35% of our portfolio in cash does not mean leaving money idle and losing ground to inflation. With the Selic benchmark rate set at 14% a year, floating-rate fixed income with immediate liquidity offers an exceptionally robust nominal return with virtually zero risk.
Beyond generating returns without volatility, a high cash buffer secures our "dry powder." In moments of market stress or severe pricing dislocations in risk assets, having 35% of the portfolio ready for deployment is a tactical advantage that allows us to seize opportunities without having to liquidate losing positions in a rush.
Conclusion and important disclaimer: We changed our minds because the market offered an exit yield on Renda+ 2065 that we consider disproportionate to long-term fiscal risk. As a result, we raised our cash allocation to 35%, securing a 14% annual yield without the volatility of mark-to-market accounting.
This is the view of our channel's team and reflects exclusively the management of our illustrative portfolio—it is not an investment recommendation. Follow the detailed evolution on our Model Portfolio page and check the auditable trade log in our Transparency section.
