Challenges faced by the Brazilian Government to Restore Individual Investor Confidence Following the Pandemic

Abstract

This dissertation explores the effects on the Brazilian stock market seen since March 2020 as a result of the Covid-19 pandemic. Stock market volatility in Brazil was exacerbated by the Brazilian government enforcing social restrictions to prevent the spread of the virus. The Brazilian government faced challenges in maintaining a balance between the economy and protecting citizens' health. The social restrictions imposed to protect citizens resulted in decreased profits and, in some cases, permanent closures of businesses. This volatility affected investor confidence in the Brazilian market, leading individual and institutional investors to rethink their portfolio strategies.

The dissertation focuses on exploring the correlation between Brazilian government policies and individual investors' confidence in the stock market, with particular reference to the fashion retail industry. The main philosophical approach related to this study was positivism, employing a deductive approach. Primary data was collected via an online survey targeting individuals who invested in the Brazilian stock market. The survey was distributed via social media and completed by 64 respondents. The study showed that the primary data rejected the hypothesis of a significant correlation between the Brazilian government's decisions during the pandemic and individual investors' exposure to the equity market.

The research revealed that individual investors increased their exposure to equity investments during the pandemic as an opportunity for potential future returns. Recommendations for future research include covering other stock market industries and variables that could affect individual investors' confidence in protecting their portfolios.