At the recent Bloomberg Invest New York Summit, one thing was clear: The US stock markets are going through a rough patch. ‘Rough patch’ may even be a slight understatement. According to some highly knowledgeable money managers, the markets are at their highest risk of collapse since the 2008 financial crisis. So where are investors being advised to move their money? Into low risk, high yield investments such as real estate. And there’s no better place to invest right now than Mexico real estate.
The Man Behind the Money
Forecasts of a potentially catastrophic end to the perilous US stock markets recent hot streak have been voiced by many industry experts. However perhaps none more so than Bill Gross. At 73 years of age, Gross is considered on all accounts a money guru, investor and philanthropist. As a fund manager, Gross co-founded Pacific Investment Management Co.. He also headed PIMCO‘s $270.0 billion Total Return Fund (PTTRX). In 2014, Gross left PIMCO to join Janus Global as a portfolio manager.
Outperforming 22% of his Bloomberg peers, Gross’s $2 billion fund has returned 3.1 percent in the year as of June 6.
US Stock Markets Not Worth The Risk
In Gross’ esteemed opinion, the current reality of the US stock markets means they’re not worth the risk to investors. In short, high prices coupled with high risk does not represent a good investment. At the Bloomberg Invest New York Summit he warned that, “Instead of buying low and selling high, you’re buying high and crossing your fingers.”
So what’s having such a negative effect on the US markets? Gross lays the blame at the feet of central banks. Current policies focus on low or negative interest rates. This forces up asset prices without creating any real growth in the economy. As a result, individual savers, banks and insurance companies are bearing the brunt of the fall out.
In Gross’ own words: “Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced.”
Barry James, president of the James Advantage Fund, backs Gross’ opinion. James argues that despite the markets currently trading at almost record highs, an imminent crash looks likely.
“We don’t know when there will be a peak in the market and a tumble, but it does look like a tire with a bulge” – Barry James
Again, these sentiments are echoed by Swiss investor Marc Faber. Faber recently described the US stock markets as a huge bubble commenting that, “there is a bubble in everything. Nothing in asset price is very low.”
Alternative Investment Options
When traditional stocks and bonds represent a higher risk than their worth, investors would benefit from looking at alternative investment options. Investopedia named real estate as one of the top 4 alternative investment options to the stocks and bonds. Thanks to rental income and property appreciation, owning a property can significantly increase your returns while minimising any risk.
Mexico Real Estate
While property prices in the US or Canada may limit the bang you can get for your buck, overseas real estate can offer higher quality for less money.
Mexico real estate is one such investment option that is backed by expert publications such as Live and Invest Overseas. Mexico real estate is massively benefiting from an unbeatable tourism industry. Moreover, coastal areas such as Riviera Maya have shown strong commitment to continued development and conservation. The result? Stunning properties in beautiful locations that can offer between 8-14% ROI through rental income alone, property appreciation. If you’re looking for a low risk, profitable place to secure your savings, Mexico real estate has a lot to offer.