8 tips for investing in Latin America

Latin America has become a place where identifying the trends that will shape the economies and markets over the coming years is the key to investing.

Here are 8 tips to keep in mind when investing in Latin America:

1. Diversify
• Developed markets have become riskier than emerging markets
• Your international portfolio should include Latin America
2. Follow the middle class
• The middle class in Latin America has grown to 51% of the major economies in 2011 which had pushed buying power and favore3d consumer stocks
3. Search for energy
• This search had led interest out of the Middle East and into Latin America for oil and alternative energy
4. Growth in banking
• Greater efficiency by banks in this region access to “unbanked” populations, the growth in the middle class and an expanding loan portfolio have contributed to this growth
5. Think outside the equities box
• Alternative assets such as private equity, bonds, commodities, real estate, and others are an important part of a Latin American portfolio
6. Exchange traded funds and mutual funds
• Good ways to lower costs and diversify across the region
7. Invest in small capitalization companies
• Investing in the region means picking the right stocks, the right asset classes and the right investment vehicles
8. Don’t ignore risk
• Risk can be measured and quantified

Diversity, stock-picking and following the long-term trends that are shaping the economies and markets are important when sitting down to research Latin America — and will make the difference to your investment portfolio.

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To learn more about the subject, check out Private Equity World Latin America.