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Investment InsightWhere Are You Investing in 2008? On tonight's episode of "What the Heck Happened in 2007?" What IS going on? What does this information say to me as an investor? Is the sky falling? I know for a fact that I do not want to put any more of my money in real estate in the US right now and I am also tired of watching that portion of my net worth drop before my eyes! Accounts held in US dollars are also losing values rapidly and this is not giving me any "warm and fuzzies" let me tell you. News like this can often be depressing, and for some devastating, but for those who can step back to see the whole picture it can also be very sobering and enlightening. As an investor I want to place my money in an area or asset that has the best chances of appreciation - duh. Developing countries, such as Nicaragua, are ripe for this sort of scenario for several reasons. Prices are good right now and opportunities are available for secure investments in assets that are certain to escalate in value. The forecast for appreciation is very healthy and many experts are predicting remarkably significant gains when the current administration leaves in a few years. Now is the moment to invest in Nicaragua and there may have never been a better time to invest than the present. Consider this scenario as just one factual example - A recent article in Barron's stated that over 24 Million Americans have already invested or are seriously considering investing outside of the US for the purpose of relocation, at least for part of the year. The most prominent area of investment for US residents is Mexico and Central America. We have all heard about the "baby boomers" (sorry - I know this term is completely stale and overused - but I had to use it here to make my point!) and their huge numbers but in addition there is a very considerable number of people out there in their 20's, 30's and 40's, who for various reasons, are also seeking to invest in real estate elsewhere. Do you want to be ahead of these people or behind them on the investment train? If we look at simple numbers - let's say that a paltry 2% of this group invests in Nicaragua, approximately 480,000 people, there would not be enough investment product for all of them in the current market! This figure would be nearly equal to 10% of the entire population of Nicaragua, just for comparison purposes. So what does this do to prices? You are correct - they go up, way up due to the inevitable increase in demand. Also note that this 2% figure accounts for the US investors only, there are at a minimum an equal number of other foreign investors out there shopping for the same products in the same market, making appreciation all the more likely driving values even higher. Numbers are numbers and formulas are formulas, all numbers and formulas that I run (and I run them often) come up with a positive outcome for investing in Nicaragua. Now couple the aforementioned reality with another factor that is coming in the near to mid-term - a certain change in governmental administration within Nicaragua. This change is going to start a massive wave of foreign investment within Nicaragua. Many very heavy hitters are already staking claims in Nicaragua, on all investment fronts, preparing for this inescapable turn of events on the horizon. Many of these investors are groups within the US. These groups are currently sitting on billions of dollars that used to fund US real estate investments, hedge funds and development projects. Well we all know the current situation and they have nowhere to put their money with acceptable risk curves. These people want their money to be working for them, as any investor should, and they are choosing to place it in a country that has prominent signs of future appreciation and growth. Thus the increased interest in Nicaragua, it is a secure investment for future growth and appreciation. As I often mention the infrastructure within Nicaragua is on the mend. Power outages are becoming much less frequent and in fact have been non-existent lately due to repairs of existing power plants and the construction of new ones. In the near future Nicaragua will actually have a surplus of power - hard to imagine to residents here but true none the less. Roads are being built at a rapid pace and the development of consumer class services is unmistakably on the rise. These are all signs of healthy growth and a positive outlook on the future. Hurricane Felix was a major natural disaster and the victims in the affected area will suffer for many months to come but they are seeing relief in many forms. This hurricane may actually be the spark that starts the fire toward much needed development of that remote region of Nicaragua. Before the storm, plans were already in the works for a major expansion of the shipping port in the area and the increased exposure from Felix has pushed that project to the forefront and has sprouted others in the tourism sector. A terrible event, yes, but the end result may be a brighter future for the residents, indications are pointing this way. What will develop from the news stories focused on the US situation? I have no clue but something that is looming out there is that it will probably get worse before it gets better. The basis of the crisis is rooted deep within the structure of the markets and this will take significant time to recoup. As for the deficit spending and absolutely massive foreign debt - boy oh boy - I am not going to touch that one. In the mean time though those of you out there who want your money to be working for you need to find sound investments and they currently exist in Nicaragua. Gain enlightenment by making lemonade out of the newsworthy lemons - not everything is always as negative as it first appears, even though the press may make it seem so. So WOW, 2007 was quite a year for us here in Nicaragua and our friends and family in the US but not all bad news is truly "bad" news if you examine it closely. An old phrase comes to mind - "When One Door Closes, Another Opens" - this is what I see from these topsy turvy turns of events of recent past. Keeping an eye out for the right timing and the right opportunity has been the key to success for many people, the right time for investing in Nicaragua is 2008 - well you can do it before then but you will have to hurry, the sand in this year's hourglass is running out and I assume you are going to want to enjoy your holidays and not work too hard, at least that is what I am going to TRY to do... Have a Safe and Happy Holiday Season and Best Wishes for a Prosperous New Year! By Johnny Tortuga - "Equitable & Forthright Commentary" Send Comments to ~ jtortuga@lagunasa.com
Investor FocusInternational Money Exchange Services
With the US real estate market still in doubt, these educated investors are looking to Central America where prices have primarily remained tied to the US dollar - such is the case in Nicaragua. The purchasing power of a Canadian dollar has almost doubled in the past several years and Canadians are getting out of the cold and taking advantage of their buying power down south. In addition to the Canadian dollar the Euro and other world currencies have gained ground against the US dollar also making Central America enticing to Asian and European investors. A few weeks ago I had the opportunity to sit down with David from HiFX, a global money exchange firm, to get a grasp on the current world currency market and learn about the currency trading process. David explained the current advantage that Canadians and Europeans have in purchasing US dollar priced goods. We also spoke about currency exchange and how banks may not be the ideal way to go. Most banks don’t handle large currency exchanges on a daily basis and many times have little to no understanding of market trends. A bank will traditionally exchange monies between currencies by buying low and selling high and then in some cases charging the customer a fee to do so. In addition they will also charge the customer to wire that money internationally. HiFX on the other hand will exchange monies at competitive exchange rates but will not charge fees associated with the exchange and the wire transfer. With HiFX you know what it will cost and not run into endless fees before your money gets where you want it to go and more importantly it will get there. Another interesting service that HiFX offers is the ability to lock in an exchange rate for up to 18 months and make monthly wires to foreign banks - so you have no worry or hassle of exchange rate fluctuations, it is locked. This comes in handy when you have payments to make on investments or properties in foreign countries and foreign or US currencies. They will take the hassle out of going to the bank once a month to send your monthly payment and secure your purchasing power at locked exchange terms, no matter what happens in the market tomorrow or beyond. I can tell you the troubles of money transfers and the ease of mind By Jonathan Belcher - Laguna, SA *Laguna, SA is not affiliated with HiFX and receives no compensation for referrals or use of their services by clients or investors.
Proyecto Laguna - Make a Difference!
Web site - www.proyectolaguna.com
Latest News & EventsNicaragua is and always will be in the news and for good reason. Here are some of the latest articles from around the globe....
* This issue's Facts & Figures information comes from a Zogby International poll of 115,000 Americans conducted over the past two years. Bob Adams, CEO of New Global Initiatives, commissioned the poll when he realized that no reliable database tracks the movement of Americans out of the country. This information was published and broken down in a recent Barron's article. If you would like a summary of the article please contact us and we will provide it to you. |
In this issueHOT Investment Tip!
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Daniel Ortega was sworn in as President of Nicaragua, rolling blackouts affected the entire country of Nicaragua for most of the year and Hurricane Felix slammed into Nicaragua's Atlantic Coast leaving a path of destruction unseen in it's history. In other news the US is faced with a major decline in real estate values, a sweeping consumer confidence and credit crisis and deficit spending is absolutely incomprehensible. Oh, and by the way, the US dollar has declined terribly, much to the chagrin of Canadians and Europeans - aahhh the irony!
Over the past several years the Canadian Dollar has been gaining ground against the US Dollar (or is it the US Dollar loosing ground?). This change has completely turned the tables for Canadians. Up until just a few years ago Canada's cottage country and other investments have been targeted by US real estate investors and second home buyers. With the Canadian dollar low Americans were able to buy Canadian properties at a significant discount. Now however the Canadians have the advantage, with a strong Canadian dollar and many properties throughout the world priced using the US dollar, Canadian real estate investors are (and should be) in a buying frenzy.
Community outreach and empowerment is an important part of our work here within Nicaragua. We encourage all developers and investors to get involved on some level. Laguna, SA is proud to support Proyecto Laguna, a non-profit company currently working in the pueblo of Diria. The work performed by the dedicated team at Proyecto Laguna is making a difference on a daily basis. Their efforts are supported solely by donations and they need others to get involved. Please view their web site for complete details, even a small donation will make a direct impact in a child's life.
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