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Mexican investments questions


gdl80
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Despite the fact that I personally hope that financialized capitalism collapses to be replaced by star trek socialism, in the meantime, appropriate to my age and obligations, I practice a careful but wide diversification across asset types and localities.  As some say, wealth management is risk management; the MiniMax rule applies.  Classically, rental real estate is ideal, but what a pain, especially if held by a foreigner during a period of social and economic upheaval.  Holding pieds-à-terre in different legal and tax regimes may or may not be optimally profitable, but it does provide options of unique value and utility under duress.  Some physical gold and junk silver, and a spot 'o bitcoin wouldn't hurt. Other hard international assets, such as energy, are best held in some securitized form, and if one has the bulk of ones' wealth in a single currency, forex can be a lifesaver.  Live long and prosper.  

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On 10/30/2017 at 3:38 PM, RickS said:

And Multiva seems like a reputable bank as they come in Mexico....”

For what it’s worth, Multiva is not a Bank.....

 

That is older information.  It used to be only an investment firm, however, it is now also a bank as well.

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I've been in Mexico 36 years and I can tell you the currency risk from the peso is too high.  Only equities in solid companies, or real estate, assuming you don't overpay, are good areas to compensate.  The pure Peso is a suckers game.  You can open a Cetes account directly with the government at Cetesdirecto.com and avoid commissions.     

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Renting any property in MEXICO, remember that income in mexico.  check with your local Mexican tax accountant, how to pay the tax on the rental income, remember that tax can be credited back in most cases to your home country taxes .

MEXICO is waking up on rental properties, soon maybe hotel tax a airb and b.

 

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Property rental is a safe investment. I would add looking at commercial properties is even better than houses, less of a hassle than renting houses for multiple reasons mostly dealing with getting people out of your property if they don´t pay, eviction process in Mexico ir really a pain in the... especially with houses.

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On 2017-11-13 at 12:02 PM, NachoOE said:

Property rental is a safe investment. I would add looking at commercial properties is even better than houses, less of a hassle than renting houses for multiple reasons mostly dealing with getting people out of your property if they don´t pay, eviction process in Mexico ir really a pain in the... especially with houses.

I would advice against buying commercial properties in lakeside. A lot are vacant and a lot of new businesses pop up then fail within months for various reasons. 

Residential is better because of the expat demand. There are other areas in Mexico that have much stronger real estate markets than lakeside which mainly depends on expats and the US economy. (Look at what happened here in 2008)

I would pick a city like Queretaro or Guanajuato where a lot of big companies have invested and created jobs. However real estate is not regulated in Mexico like in the rest of North America so there's a lot of risk too. If you don't know Spanish things get even harder to invest in those markets. The other thing about real estate is capital gains when you sell. They can be quite high. CDs get taxed at a flat fee of 5% (I believe it's 5% but  it's in that range). Ohh and let's not forget about maintenance and management of real estate. 

I have had CDs with multiva for over 2 years and mutual funds. I average around 7% yearly on CDs (inflation is around 5% so you are still netting 2%) and the funds I got pretty lucky with around 20% returns but they are high risk ones. 

The bottom line is like you said it's not so much bank fraud as is the risks you are willing to take with currency and the type of investments you make. 

If you are planning to live in Mexico long term I think CDs are a good option (especially short term) because you will need to use pesos either way to pay for things. How much you want to exhage is then up to you. 

 

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I second the MultiVa vote.

The last time the government devalued the peso was in 1994. Many lives and businesses were ruined.

I don't think that would happen again, not just for expats fleeing, that's probably not a major income for Mexico, but the Mexican people might be up-in-arms, literally, and that would be a disaster.

Cutting graft/embezzlement would help, but that's ain't gonna happen.

Guess it's best to just be conservative and as said above, don't put more into Mexico than you could afford to lose.

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In 1994 the Gobierno controlled the exchange rate, so ONLY they could devalue the Peso.  Two days after the devaluation they took a decision to let the Peso float,  i.e. become a free-market currency.  It's been that way ever since.  The only way the Gobierno could "devalue" the Peso would be for them to take full control of it again.  Not likely to happen.

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1 hour ago, El Saltos said:

The only way the Gobierno could "devalue" the Peso would be for them to take full control of it again.  Not likely to happen.

Would not printing more pesos devalue it, something the government can do?

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Assuming AMLO continues to lead the pack a significant dip in the peso after the election might provide an opportunity for a little currency speculation.  When they realize he isn't the Devil Incarnate it would likely rebound.

As for importing to Mexico, good luck Barcelonaman.  These guys are like the Japanese and Chinese, very good at gumming up importation without seeming to violate trade agreements.

 

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On 10/30/2017 at 10:49 AM, gdl80 said:

Hi, 

I'm researching ways to invest a large capital sum in Mexico. It would be sent from Europe.

Can you share your investment experiences/recommendations for larger sums of money in Mexico. I am looking at O'Rourke investment funds as a possibility. Any experience with them? Also read that some people use Multiva and Actinver bank for investments. Are these safe? 

My main concern is how safe is it to have a large amount of money is in a Mexican bank/ investment fund without it getting stolen (through an inside job mainly) 

The Economy in Mexico is Booming! You should look into the Mexican Federal Treasury Certificates (CETES). They can be bought at many banks or investment houses. I owned some  over 40 years ago that paid really big interest. They are issued in 28 day and 91 day notes. They have been paying 7% for since July of last year. I think you'd be ok with them. You'll have to ask about denominations.  Info Here

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I used MultiVa (Casa de Bolsa) and just let them manage my investment account. They did quite well for me.

Not that I had any problems with MultiVa, I did not, but I have now moved my investments to another country (Grand Cayman) to avoid disclosure of my account balances locally.

Cartels pay more for that information than account managers make in a year. I just felt it wise to remove that temptation -- for everybody's sake.

 

 

 

 

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15 minutes ago, Aquaponicsman said:

Not that I had any problems with MultiVa, I did not, but I have now moved my investments to another country (Grand Cayman) to avoid disclosure of my account balances locally.

Cartels pay more for that information than account managers make in a year. I just felt it wise to remove that temptation -- for everybody's sake.

Slick move.

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4 hours ago, geeser said:

The Economy in Mexico is Booming! You should look into the Mexican Federal Treasury Certificates (CETES). They can be bought at many banks or investment houses. I owned some  over 40 years ago that paid really big interest. They are issued in 28 day and 91 day notes. They have been paying 7% for since July of last year. I think you'd be ok with them. You'll have to ask about denominations.  Info Here

Everything  paid more 20plus years ago, 1995 up you could make 50% plus on any balance in the bank...that's when the peso tanked...that's other reason that overhaul your dollars  are best left in the USA as the ex rate gives you a false feeling of making positive gains on any mx investments...bring down dollars enough for you to live on

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4 hours ago, Aquaponicsman said:

I used MultiVa (Casa de Bolsa) and just let them manage my investment account. They did quite well for me.

Not that I had any problems with MultiVa, I did not, but I have now moved my investments to another country (Grand Cayman) to avoid disclosure of my account balances locally.

Cartels pay more for that information than account managers make in a year. I just felt it wise to remove that temptation -- for everybody's sake.

 

 

 

 

Sorry maybe I didn't read this right. Are you saying cartels were paying the bank to disclose them your account. Sounds very strange?

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18 hours ago, geeser said:

The Economy in Mexico is Booming! You should look into the Mexican Federal Treasury Certificates (CETES). They can be bought at many banks or investment houses. I owned some  over 40 years ago that paid really big interest. They are issued in 28 day and 91 day notes. They have been paying 7% for since July of last year. I think you'd be ok with them. You'll have to ask about denominations.  Info Here

In the last 12 months the Pesos has lost more than 10% of its value.  Now how's that 7% look?

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15 hours ago, El Saltos said:

In the last 12 months the Pesos has lost more than 10% of its value.  Now how's that 7% look?

In one year it went from 20.6 to 18.6 now. Peso got stronger not weaker. Wonder where you got the 10% figure. Also if the peso weakens you only lose if you need to exchange back. If you live here long term there is less need to exchange back and fourth. 

What impacts people that have pesos is the inflation rate. Usually CDs keep up with inflation. An inflation of 5% is not awful. CDs make 7% so you net 2%. If CDs gave you 50% return that would be a BAD situation because your money would be devalued just as fast. I don't see that happening in Mexico. They are one of the richest countries in the world with solid growth. 

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I came here a decade ago and decided not to buy a house, to just rent.  I also looked at the banking here and decided there was no way I wanted to deal with any of them.  Things have probably improved in the last decade, I really haven't looked.  I don't have any bank accounts here and get along just fine.

If you are looking for just straight investment for income, the Caymans are great.  They handle a lot of huge funds, have the people and the experience and run under British law.

Lots of really good investment houses there.

Mexico is growing rapidly which should mean that there are good investment opportunities here but I don't understand the legal system or speak the language well enough to handle my own stuff here, so I go else where.

 

 

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7 hours ago, Crazydog said:

In one year it went from 20.6 to 18.6 now. Peso got stronger not weaker. Wonder where you got the 10% figure. Also if the peso weakens you only lose if you need to exchange back. If you live here long term there is less need to exchange back and fourth. 

What impacts people that have pesos is the inflation rate. Usually CDs keep up with inflation. An inflation of 5% is not awful. CDs make 7% so you net 2%. If CDs gave you 50% return that would be a BAD situation because your money would be devalued just as fast. I don't see that happening in Mexico. They are one of the richest countries in the world with solid growth. 

Sorry, I didn't mean 12 months, look at the last few months.  Then  look at the 5 year chart and tell me the Peso is gaining value.

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On 11/24/2017 at 6:30 PM, Aquaponicsman said:

I used MultiVa (Casa de Bolsa) and just let them manage my investment account. They did quite well for me.

Not that I had any problems with MultiVa, I did not, but I have now moved my investments to another country (Grand Cayman) to avoid disclosure of my account balances locally.

Cartels pay more for that information than account managers make in a year. I just felt it wise to remove that temptation -- for everybody's sake.

 

 

 

 

So how do you invest in the Caymans

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On 11/25/2017 at 12:02 PM, El Saltos said:

In the last 12 months the Pesos has lost more than 10% of its value.  Now how's that 7% look?

If you live here and operate in pesos you'd be better off with CETES at 7% than pesos under your mattress. Inflation here is running 5.02% so some yield is better than none.  Of course the safest bet is to have your assets in multiple countries. CDs in the USA have been a loosing proposition for several years through this 0% climate there. 

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