Investing in Brazil Before a Dollar Collapse
Brazil for Retirement Investing Safely Against Dollar Slide
Oct 8, 2009
While the average investor in the SP500 has lost a large part of their retirement portfolio, those brave retirement investors that invested in Brazil enjoyed 300% plus returns. The road to Brazil's stock market gains has been bumpy. Still, investing for retirement now requires thinking outside the sinking U.S. dollar and stock market.
Top 3 Ways to Invest Retirement Funds in Brazil
Not included in this list is simply moving to Brazil and buying land to live there. This is the single best way to enjoy the many benefits of investing in Brazil, though an unlikely one for most retirees. Even without moving there, a person nearing retirement can move funds onto the Brazil gravy train.
Invest in Brazilian Currency
In days long gone by, Brazilian's protected against a currency crash by investing in USD. Now the currency crash is in the U.S. and Brazil's Real (pronounced "Hey-Al") is a stronger currency. Part of the reason for the Real's strength is that Brazil exports agricultural goods to almost every important country, collecting foreign reserves in the trade. So long as people are eating, there will be a growing demand for Brazil's farm products and a demand for Real's with which to buy them.
Brazil is also part of the group with China, Japan, Saudia Arabia, etc agreeing to move away from the dollar for trading oil. The next move will be for agricultural products to trade in Reals. Wheat and corn may not make the change, but sugar and beef may.
Retirement Stock Investing in the Bovespa
Brazil's Bovespa is a rapidly growing stock market with increasing world-wide exposure. EWZ is an ETF that allows North American investors to buy into the Bovespa market through an intermediate investment. This is the same ETF system for buying gold.
With rapid growth comes volatility. Retirement investment funds often back away from volatility in favor of normally more stable bonds or large company stocks. This has been a money losing strategy for almost a decade now and will possibly continue. Even if only a small 10% of retirement funds move into a Brazil investment, the benefits can dramatically impact a portfolio favorably.
Long Term Retirement Investing Options in Brazil- Farm Land
Commodities generally have been in a rising trend since 2001 and may well gather more steam as the U.S. dollar continues declining. Brazil's agricultural production has become central for feeding China, Europe, and even the U.S. Farm land prices have increased along with the commodity prices. Investing in Brazil farm land can be as simple as joining a land partnership, or buying even land oriented companies that trade on the U.S. indexes that will be covered in a future article.
There are other ways for benefiting from Brazil's rise and the U.S. dollars fall, but the above three ways to invest in Brazil will bring rewards for those brave enough with a retirement portfolio.
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