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Author: Subject: Analysts predict peso will make a comeback
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[*] posted on 1-9-2018 at 12:00 AM

Currency is the opposite of stocks
Stocks: Buy low sell high
Currency: Buy high sell low

"A ship in harbor is safe, but that is not what ships are built for." J. A. Shedd.

"Life's a Beach... and then you Fly!" Fishbuck

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[*] posted on 1-9-2018 at 02:08 PM

Quote: Originally posted by fishbuck  
I figured it out
I buy pesos at 20/1
I sell pesos at 10/1
I double my dollars:light:

Investing is so simple, isn't it, Fishbuck!!!

Seriously, to answer your earlier question, if there is a significant weakening of the peso over a 1-2 week period, you could exchange dollars for pesos and proceed immediately to wherever you are going to buy building materials, durable goods, etc. before they have a chance to change their prices. This is especially true if your materials are not imported from outside Mexico.

A house might seem like a good buy but real estate tends to correct quicker than anything, especially if the owners are gringos.

That's really about all you can do to take meaningful advantage of short-term changes; outside of eating and drinking in restaurants a bit cheaper until they change their prices. But it can be fun............

I remember when I retired to San Carlos in 2008. I had sold my house in early 2008 in CA that I had held since 1994. The Great Depression was fully involved, I was earning 4% in a money market account on the sale and there were hybrid stock/fixed rate annuities that were guaranteeing 6%, but that was long term. In retrospect, I should have put more money into long term instruments back then, but the whole economy was so tenuous, I just wanted my money safe. My 403b eventually became worth less that 50% of its peak...........but did eventually return. I had to sit on it anyway, unless I wanted to take a penalty and be taxed on it. I really didn't need it to retire in Mexico back then. Our dreams were frugal.

Anyway, the peso devalued by 30% within two months after arriving. I still remember a full, shrimp dinner in the best seafood restaurant in Guaymas was 60 pesos or about 3.75. Fish dinners were even less. Diesel for the boat in Mexico was a bit over 2.00/gallon as I recall.

I thought retirement was going to be more golden than I ever anticipated. But the sweet spot in exchange rates/interest rates/cost of goods in Mexico didnt last. Prices corrected within six months and yields like those disappeared at about the same time and have yet to return.

However, one disadvantage to buying materials/durable goods etc. before you might need them (say, for building) is that you have to protect them from theft while you hold them. That's getting harder and harder to do in Mexico, IMO.
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