Political Instability and the Cost of Uncertainty: 1,103 Election Complaints in Focus

The start of the 2026 election campaign has signaled rising institutional volatility to the market. With 1,103 complaints logged via the Pardal app, the political environment is impacting investment predictability. In an economy where the commercial dollar has risen 1.47% over the last 7 days to R$ 5.1714, noise regarding institutions affects investor risk appetite. Historically, the Brazilian capital market demands higher risk premiums when election noise overshadows the economic agenda. With 12-month IPCA at 4.44% and the dollar showing a trend of high volatility, foreign investors are closely monitoring the stability of the rules of the game. Using Ray Dalio’s Credit and Liquidity Cycles, we see a liquidity contraction phase where the market penalizes risk assets at the slightest sign of disorder. The real risk lies in excessive judicialization and legal uncertainty, which drains public management efficiency. Investors are advised to maintain a margin of safety, following Graham and Buffett’s value tradition, avoiding speculative assets and focusing on inflation-indexed protections.