Given the recent events in the US banking sector, it's a good reminder of the importance of diversification. Anyone with even a basic understanding of investing knows that the key to financial stability is diversification. Having a diverse portfolio means that your risk is reduced by spreading it across various investments.
Investopedia describes diversification as "a risk management strategy that mixes a wide variety of investments within a portfolio [...] in an attempt at limiting exposure to any single asset or risk." For many, this means investing in many different industries in the stock market. For others, it could mean having diverse stock holdings mixed with various government and private bonds. Some may take it to include investing in real estate in addition to traditional banking and the stock market. There are many different strategies to achieve diversification, but one factor that is often neglected is where your diverse assets are located.
From Argentina and Turkey to Lebanon and Venezuela, various countries around the world have faced currency crises that had broad effects across their financial systems. Today, several more previously considered stable countries are at risk of a financial crisis and recession. This can create fear and uncertainty in the short-term, but it's important to remember that most well-developed economies will rebound in the long-term.
In the meantime, consider diversification not just in the form of assets you hold, rather their location as well. Having 100% of your assets in a single country means that you are fully exposed to the risk of financial instability if the economic or political situation in a country changes.
Paraguay represents an interesting option for investment outside your home-country or your traditional markets. It is one of the most economically stable countries in Latin America, and benefits from a growing GDP. Returns are also generally higher than those of traditional markets. There are a large variety of investment options in the Paraguayan real estate market to consider, with entry tickets starting from below $40,000 USD. Whether you are looking for a studio apartment to rent out, land for development, a ranch for agricultural production, or just a property for longterm holding or retirement, feel free to reach out for more information!
Comments