A strong economy commonly has a strong middle class and the purchasing power of the middle class further drives the economy. As Latin America grows so does its middle class. To a large degree to invest in Latin America is to invest in middle class growth in Latin America. Overall the middle class has grown from 40 percent of the Latin American population to just over 50% in the last decade. Per capita income south of the Rio Grande has risen from the $7,000 a year range to just under $12,000 a year. A combination of social and political changes has made a big difference. The economic boom prior to the bust of 2008 paid Latin America for its commodities. While boom times have slowed down the growing purchasing power of this segment of Latin society provides good reason to invest in middle class growth in Latin America.
IPads and Blackberries Everywhere
Large parts of Latin America have jumped from poor or no telephone service to reliable wireless communication in a generation or less. Rather than string miles of now-expensive copper wire phone lines nations in Latin America put up cell phone relay towers across the nation and coaxial or fiber optic cable for fast internet services in cities. Buy a month by month contract with British Cable and Wireless in Panama and talk to your mom in Bogota or children in New York. With fast telecommunications come advertising for everything from new cars and homes to washers, refrigerators, clothing, and Christmas presents for the kids. If you are interested in doing fundamental analysis of Latin American investment opportunities just walk down a main road in a Latin American city and count the hand held internet devices.
Retailers Expand and Consolidate
A good way to invest in middle class growth in Latin America may well be to check out the retailers. Almacenes Exito in Colombia is selling shares of its stock to finance expansion into Uruguay as well as other Latino nations. In Brazil, Companhia Brasileira de Distribuicao Pao de Acucar (CBD as and ADR) is acquiring retailers across the nation that many call the next Latin American superpower. A quick trip to Panama City, Panama at the junction of the Americas will show the interested investor an economy that did not experience a recession in the last few years. Economic growth in Panama is coming back to around ten percent a year. Shopping malls that rival those in North America are packed with shoppers speaking Spanish, English, French, German, and Han Chinese. If you are interested in investing in foreign stocks, Latin America may be the next great place to be. As always the easiest, and perhaps safest, route to foreign stock investment is with American Depository Receipts. These are foreign stocks listed on US stock exchanges. Invest in dollars in companies that make their money in pesos, balboas, colones, and reales.
Invest in Middle Class Growth in Latin America through Real Estate
We mentioned Panama in our article, Foreign Real Estate Investments. One can invest in middle class growth in Latin America through real estate. While running a business in Latin America during your retirement years may not be your cup of tea, buying 30 th floor condo with a view of the Pacific approaches to the Panama Canal may be. If so, consider that the best route to invest in middle class growth in Latin America may well be to buy and least property in the city where high rises continued to rise in the last four years.