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Hi all, I am new in the stock market and would like to know more about the Peruvian stock market – like is it safe investing there, are there any near losses? I would like to have the suggestions of people that have really been there and have an internal experience of that stock market. Your suggestions would be appreciated. Thanks!
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Where do I even start? =P
Simple answer... it doesnt matter what I think, and if it will go up or down. What matters is even if we take into account that it can go up or down 25% within a week or two, no matter, the volatility, or possible corrections.....
There is no direct way as I know of of investing directly in that market. There are no ETF's as far as I recall that invest only in Peru. So you would have to either invest in international ADR's (once again if there are any) or open an account directly there.
Are there alternatives... absolutely. -
All I have to say is that it is way to specific to bother with. It would probably be better to focus on a south american index.Comment
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I can vouch for it being a good country for investment. My only financial stock I own in my portfolio is Credicorp. So it gives you an idea I like the country. I feel the political climate is safe for now and as long as the commodities sector holds true to form it will remain above average.Comment
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as a financial planner I cant let this go. This is like saying I like energy and I like the United States, let me put all the money into Enron without any hedges on it. =POriginally posted by JBinKC View Post
If Enron, Tyco, Wolrdcom can happen here... what is to say it cannot happen in Peru? There is a reason why it is calling Emerging Markets. And take a look at the returns of that sector before 2002.
Lets call this what it is.... gambling. Pick a company in an emerging country and invest in it. Common stock, or in this case an ADR, doesnt have voting rights, and is last in line to get paid in case of bankruptcy... kinda the short end of the stick.
If you are dead set on it... pick up some ADR's and if options are offered, hedge those companies, so at least if it goes down... you will be made whole or make up some money.
Your real best bet if you want to participate in latin american emerging markets... pick up a latin american ETF, and buy options to hedge it.... or best of all...buy a latin american emerging markets actively managed mutual fund, where the fund company can send people on the ground to those companies to look at their books and pick up the safER investments.
If you want to pick up a couple of good companies... make sure it is money you can live without. There is a reason why Warren Buffet Just made his first international investment... into the worlds largest IPO.Comment
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Since I was interested, look at the LIma General indice. From 2003 to early 2007 it went up from below 400 to 24,000. From early 2007, the peak at near 24,000, it went down to less than 13,000.
Tell me that is not gambling. It is great if you got in in 2003 or earlier... but if you got in 2007, you took a 50% hit. If you got in now? Who knows where it will be this year or next... heck... if it goes from 17,000 now down to 1,000.... the investers from 2003 still more than doubled their money in 4 short years... and you? Lost almost all of your value.
If you bought in 2007 and hedged, you would do well... if you just bought, much like folks bought google at 700 because it was going to a $1,000.... or thought the tech stocks in 2000 would keep going up.... in a rude awakening.
Will leave you with this note...
Bulls and bears make money... pigs get slaughtered.Comment
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I second this general warning.Originally posted by MaksimFA View Post
(Note: I'm not taking sides when I say that.)Last edited by Broken Arrow; 03-31-2008, 11:46 AM.Comment
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Maksim, I understand what you're saying, but JBinKC is no novice. He knows what he is doing.Comment
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Note: This question's title is not about asset allocation. Its about the country and investment climate and my comment about it holds.Comment
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And hence how I answered it two ways.... Sorry, didnt mean to pick on you, but it was a layup. Seen it happen wayyy to often.Originally posted by JBinKC View PostComment
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