Weak Peso good time to invest in Mexico

The weaker Mexican peso is enticing foreign investors into the stock market in record numbers. In fact, so many foreigners are investing in Mexican stock right now that the IPC closed up 1.3% in just one day this week, and spirits were running so high that the market opened higher by 1.9% the next morning! Follow IPC (Mex) to keep informed on this topic.

One need only understand a little of what has happened during the past week to understand why investors are flocking to Mexico at this particular time. The first hint came when President Calderon announced that he believes Mexico’s economy has turned around and is headed back in a positive direction. That could be passed off as just something Presidents say as part of the public relations propaganda of their nations. This time, however, such was not the case and President Calderon was right on target. One would have to know who does business both in the U.S. and in Mexico to pick up on the second big happening of the week. General Motors came out of bankruptcy in the U.S. and began putting its workforce back on the job in Mexico. There were many reports on each of those situations, but only a few connected the dots and recognized that higher than expected corporate earnings in the U.S. means that they are back in the game as well. While some Mexicophiles might not like the fact that Mexico’s economy is, at least to some degree, connected to the U.S. economy, the fact remains that a healthy U.S. economy leads to a healthier Mexican economy.

In the meantime, the peso is still weak. Investors would be foolish to believe that situation will last long. This recession is ending and the economy is going to pick up at a speed that few now even suspect. Now is the time to buy whatever piece of Mexican real estate one is interested in - and insist that the purchase be made in pesos! For example, today - the conversion factor is 13.7872 pesos/USD. This means that real estate purchased for $1,500,000 MXN would cost $108,825.98 USD. If that exchange rate falls just one point, to 12.7872, then real estate purchased for that same $1,500,000 MXN would cost $117,304.80 USD. Conversely, at today’s exchange rate, a potential investor can pay $100,000 USD and purchase a Mexican property valued at $1,377,544.07 MXN. If the exchange rate falls just one point, to 12.7872, that same $100,000 USD would only purchase a Mexican property valued at $1,278,720 MXN. Any way you look at it, the economy in Mexico is improving and the exchange rate is going to fall. Unless a potential investor is just ready and waiting to give away their hard earned money, now is the time to take advantage of the situation and buy that perfect piece of property in Mexico