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Proposed itinerary for Peru and Brazil

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Greetings! I've started on research and planning for my upcoming trip to South America in 2014 (late July / early August), and have my eyes set on Peru and Brazil. This will be my first trip to the continent, and I hope to get a good taste of what the lands have to offer. I enjoy history, culture, hiking, nature, etc. Please comment on the proposed itinerary below and offer any suggestions, tips, advice you may have.

Lima - 3 nights
Sacred Valley (based out of Ollantaytambo) - 3 nights
Aguas Calientes - 2 nights (will do a one-day Inca Trail hike starting at KM 104, followed by a full day at Machu Picchu the next day)
Cuzco - 3 nights
Iguazu Falls (based on the Argentine side) - 3 nights
Rio de Janeiro - 5 to 7 nights
Paraty or Buzios - 2 or 3 nights

Which of the locations in Peru would it make the most sense to add an extra night if I have it? In Rio, I'm thinking about renting an apartment in Ipanema rather than at a hotel, mainly due to costs; any suggestions here? And between Paraty and Buzios, which would you choose and why?

Other than working with a travel agency to reserve tickets for the Inca Trail and Machu Picchu, I've not done much by the way of purchases but hope to do so in the coming weeks / couple of months.

Thank you in advance for your help.

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