Crisis Investing: 3 Markets To Watch

Crisis investing is about timing. Get in too early, before prices bottom out and before a market has a clear path back to prosperity, and you could be waiting a long time to realize your investment return.

One crisis market investors have been trying to time for re-entry for more than a year is Spain.

As Spanish property expert Barbara Wood explains in the feature report in this month’s issue of my Simon Letter, the challenge is that the Spanish property market is made up of many different markets, each with its own buyers. Some markets are driven by local buyers, some by foreigners in need of financing, and others by foreigners who invest with cash.

Areas of the country dominated by foreign buyers who tend to pay with cash—that is, higher-end expat markets—are seeing some recovery. So are markets such as Barcelona that attract foreigners and wealthy locals. Other markets, specifically those driven by local buyers, are still waiting to see any serious signs of recovery.

Again, I’ve asked Barbara Wood to report on the current situation and current opportunities in detail for my Simon Letter readers this month. Bottom line, whether you’re a cash buyer or need financing, some markets in Spain deserve your attention right now.

Argentina is another market in the midst of economic crisis that you should be paying attention to right now. The presidential elections earlier this month may signal a positive turning point for this country. President-Elect Mauricio Macri has his work cut out for him, but if he can effect positive change without alienating all the Argentines who have become used to government subsidies and handouts, Argentina could see another positive economic run… meaning the time to invest in the country could be now. I asked longtime friend and colleague Paul Terhorst, with decades of experience reading the tea leaves of Argentina’s dramatic economic cycles, for his report on the scene on the ground in this country right now and his insights into what the current situation portends for Argentina’s future. I’ve included it in full in this month’s Simon Letter issue, as well.

This month’s Simon Letter issue, in subscribers’ e-mailboxes today, also features a dissection, by me, of how to build a diversified real estate investment portfolio. Having prepared this for the premier issue of my new real estate investment publication Global Property Advisor, I realize that Simon Letter members could benefit, as well. Traditional investment advisors don’t typically discuss real estate as an asset class. When they do, they don’t get too deep into the subject.

So I’ve prepared a model real estate investment portfolio that includes every type of real estate I suggest you consider. It’s a starting point to help you understand your options when investing in real estate… whether in your home country or offshore. While it is easier to focus on just one real estate class when investing in property, long-term you want to hold different types of real estate, just as you want to hold different types of stocks and bonds.

I’ve received emails from readers wondering about my take on the property market in Paris in the wake of recent events in that city. I’ll comment here, as some might classify Paris as a crisis market right now.

I’d say that, if you’ve been thinking of buying an apartment in Paris, either for investment or personal use, this could be a window to act. Recent events are softening the Paris property market, both for sales and rentals. Rentals are down (as they have been, in fact, since 2008… though we’ve been able to keep our city-center apartment almost fully occupied, including by a new tenant who signed a lease just two weeks ago), and sellers are worried and open to offers.

All markets, including this one, move up and down. The recent tragic events mean a downward shift. Thinking long term, though, Paris is Paris will be Paris. This city will always have an appeal.

Lief Simon

“Lief, a few years back you wrote about a university/college in Panama City that provided services for developing computer/online/Internet businesses that could then operate tax free.

“After much research we are ready to launch an international Internet product that will utilize UPS or FEDEX. I plan on being in Panama soon to pursue this business opportunity. And I’d like to base my enterprise in the center you wrote about. Sorry to be so vague, but do you know what I’m talking about?”

W.L.

You have two options. You could base your business in Ciudad del Saber. This is a tax-free zone; however, a company has to be invited or approved to base itself here.

Your other choice is Panama Pacifico, the newer Panama City incentivized business zone. I’d recommend meeting with an attorney in Panama to discuss both options in the context of your business idea and objectives.