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My father in law who is Tico and “campisino” has a distrust in banking and other financial services. He does have some money saved and wants to do some low-risk investment. My question is are there any type of mutual funds available that are like an IRA. Also, are there CD’s available in Costa Rican Banks, that are comparable to what is available in the US? Any info would be appreciated.
He distrusts banks but would trust investment advice coming from someone who calls himself something like ‘cp1436’ in a Discussion Forum?
There are funds available but they are typically packaged funds where the management is done elsewhere, this means that fees and commissions tend to be higher than they should.
We do have a number of locally managed REITS (Real Estate Investment Funds) which have done fairly well but again, unfortunately tend to have high fees…
Costa Rica is NOT a sophisticated financial centre and form what I can see, we do NOT have any unusually successful money managers in Costa Rica.
Scott Oliver – Founder
WeLoveCostaRica.comcp3o – I guess your father in law has enough reasons to trust you to get information for him; he’s family after all and I’m sure he’s intelligent enough to reach his own conclusions thereafter. And he’s right not to trust the financial services industry generally speaking, although there are of course many good professionals out there.
Sometimes the lowest risk investments are exactly the opposite of what they are supposed to be. I mean these days a fund might have any number of time bombs hidden in it in the form of derivatives or loan related high performance vehicles.
Since he’s a campesino how about simply buying land? (unless of course he needs income). If it’s long term I suggest metals although this subject has been well covered in this forum before.
Or as Scott suggests the local real estate REITS have performed well to date. The banks here can buy almost any international stock or fund and fees can be negotiated down as much as 75% in my experience.
Whilst I may not be able to give specific pointers in this forum he might want to find a good stock/fund newsletter to follow before making a rush decision. The Hulberts Financial digest tracks industry newsletters and you can see the performance dating back up to 25 years in some cases. So unless you are focused on local product this might be a consideration.
Go with what you know and understand might be the best advice anyone can get. Agriculture is where the big money will be made in the next ten years and beyond so he might just have what he needs right under his nose!
It’s been my experience that educating unsophisticated Tico investors about the types of investment that are available is a VERY tough job.
I am the professional investment advisor to the former CEO of the Costa Rica Stock Exchange and the former Minister of Finance for Costa Rica (see his letter at ) and a few other sophisticated clients and they are a pleasure to deal with but, I would agree with simondg – You would be safer recommending something that’s ‘easy to understand’ and that’s ‘comfortable’ like land or a small rental property and you’ll probably get a quick decision that nobody will regret…
Recommend something more ‘sophisticated’ and ‘new’ to a family member and if it doesn’t work out exactly as planned – which it won’t – then your family relations will be strained.
Scott Oliver – Founder
WeLoveCostaRica.comWell here is the issue:
My father in law only has a few thousand dollars to invest. My wife and mother-in-law know that if he has the money “laying around” he will spend it on “luxuries” like a new fishing boat, television, etc.. Let’s take into consideration that they are of humble means, but not poor, just average ticos, financially speaking. That being said my mother-in-law wants to put it into something that so that he cannot spend it for sometime i.e. a CD. I was just wondering if the banks there have anything like that.While I have not carefully investigated this, it does seem to me that at least some of the banks that operate in Costa Rica offer Certificates of Deposit and for varying lengths of time. Some folks put money into CDs in a “staggered” fashion.
That is, on Day One they buy a six-month CD, a one-year CD, an eighteen month CD, a two-year CD, etc. That gives them some liquidity, some interest income, and a better return than just putting the whole bundle into a six-month Certificate which typicaly offers the lowest rate.
As each CD matures, you have the option of cashing it in or buying another CD.
Edited on Oct 10, 2007 14:44
Hello I am interested in finding a Scotiabank in the Dominical or southern zone.
Does anyone know where Perez Zeledon is or Los suenos? They are supposed to have
a Scotiabank there. Does anyone know if there is a Scotiabank in San Escidro de
General? Thanks for your help. Am also interesed in a website for small jungle
style homes or bamboo homes.
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