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Latin America Investment News on Viva Tropical

Real Estate and Private Bonds Remain as Best Investments in Panama

Article Summary:

In Panama, buying real estate has always been a good choice, along with investments in financial instruments such as corporate bonds in emerging markets or traditional markets where products are produced. Ask prominent Panamanian entrepreneur Roberto Alfaro, his advice; “find businesses that produce up to 10% of dividends in order to maintain an acceptable rate of growth of capital investment.”

Photo Credit: Capital

Original Article Text From Capital via Google Translate:

Real estate and private bonds, investment options

If you are a person who has a capital of $ 100,000, $ 500,000 or $ 1 million to invest, there are several opportunities in the market for returns interesting, according to experts consulted by Capital.

In terms of activities, one of the sectors has attracted interest is real estate. And in the case of financial instruments, the appetite for corporate bonds in emerging markets remains strong, but is more conservative investor may consider some options in the banking offer.

For the entrepreneur Roberto Alfaro, Panama has always been a country where the real estate investment has paid dividends and that is a good starting point.

“Today, with high inflation inside and outside our country, have the money in the banks does not replace or even the loss in purchasing power,” he said.

The recommendation is to find businesses that produce up to 10% of dividends in order to maintain an acceptable rate of growth of investment capital.

One of the alternatives presented by Alfaro is to be taken into account the burden that comes from China and Japan to the West Coast ports of the United States (U.S.) in the large Post Panamax and is distributed internally via air, land and rail.

It is estimated that after 2014 25% of that burden will pass through the Canal to ports on the East Coast.

“This change could cause them to investors many new businesses in Panama. For example, if only 10% of this burden is now Latin America destination to stay in Panamanian ports and could give some added value, and if in any part of this burden could be placed in the free zones of Panama Amazon Target Walmart large to be repackaged and sent through the companies from Panama through DHL and FedEx to customers around the world, we would create the largest distribution hub for goods from the continent, “he said.

Not to mention investment opportunities that exist in yards and businesses that serve them, around the maritime industry.

Tourism is not far behind among the investment options. And not only traditional business directly linked to this activity, but others, such as handicrafts. Convention tourism to be developed in the country, for example, opens up interesting alternatives to microentrepreneurs linked to this sector.

Alfaro added that there are businesses that can be done with little investment in Panama and that the statistics of the investments of companies exporting under the FTA in the U.S., Mexico and Canada (NAFTA), show that 80 % of them are small and medium enterprises with fewer than 25 employees.

Capital Submarket
But if what you are looking for an investment in the capital market, corporate bonds of emerging markets, high yield bonds and U.S. market shares in high dividend yield with exposure to global markets (Nestle, Novartis, Astra Zeneca, HSBC, Unilever, Philip Morris, Roche), may be an option, recommended Gabriel Fabrega, director of the Panamanian Chamber Capital Markets, who is also executive director of UBS Advisors in Panama.

He explained that the investor has $ 1 million or more, has the ability to invest diversificadamente fixed income (bonds) and equity (common stock) of individual firms, as in metals, structured products and other investments that are appropriate to their Profile.

The percentage or weight of each of these components, of course, what determines the profile of the investor.
As for the investor who has $ 100,000 to $ 500,000 to invest, suggests making investments through mutual funds and other investment groups, as the investment amount is not enough to achieve adequate diversification in investment vehicles of individual issuers.

“For example, most bonds have investment minimums of $ 100,000, so unless the investment is concentrated in a single issuer, it will be unable to diversify their fixed income portfolio. Ideally, no individual position in the portfolio has a weight of more than 5%, or even less, “Fabrega said.

Age is also a factor to be taken into account when it comes to investing in stocks.

The counselor explained that an investor could devote 20 years to 80% of its portfolio diversified investments in stocks, while a 70-year investor should spend no more than 30% of their portfolio to shares.
Why? The first has time to recover from potential losses, while the 70 years you need is live on their fixed incomes and have no volatility in the value of your capital.

Banks
In addition to age, another important issue when investing is what percentage that amount of money in his personal or family property.

Ramon Martinez, manager of Balboa Bank recommends keeping all investments in cash a percentage of at least 20%, preferably savings account to cover any emergency or seizing an investment opportunity that comes along.
The banker also suggests diversification bank deposits, not only among banks but also several different terms, to obtain a higher average yield.

As for the diversification of investment portfolios, he added that not only must take into account different instruments, but also different sectors, regions and / or currencies.

Enterprise
Investment in entrepreneurial projects could become another good choice.

Manuel Lorenzo, director of the Business Accelerator City of Knowledge, said that for investors with a risk profile given the possibility of investing in start ups, ie in emerging companies with high growth potential, which have begun to popularize by the existence of incubators, support systems to entrepreneurship and Venture Club, which is the largest network of angel investors in Panama.

For investors who decide to bet on startups, Lorenzo should think of investment portfolios rather than individual investments, considering how many of these investments may attend.

also noted that such investments can not be passive, but on Rather, there must be involvement. These are long term investments, because they rarely offer the possibility of dividends, but the future profitability is obtained either through the sale of the company it has already been established or an IPO.

Currently, the average money spent usually in these businesses is around $ 200,000.

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From Capital

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