Skip to Content
Stock Strategist Industry Reports

Is a Reversal of Fortune Imminent in Latin America?

If Mexico has maxed, could Brazil be beckoning?

Mentioned: , , , ,

Last October 19, the Brazilian government imposed taxes on foreign purchases of the country's stocks and bonds. The government levied the taxes to slow down the colossal run on the Brazilian real, which had appreciated by more than 26% during the 10 months prior. At that time, we recommended looking at Mexico, rather than Brazil, for Latin American investment prospects. While that call has worked out well, the real question is, what's the best move going forward?

Before the imposition of the foreign investment tax, Brazil was massively outperforming Mexico, and for good reason. After all, Mexico was in the midst of a severe economic contraction, industrial production and consumer confidence were at multiyear lows, unemployment was at multiyear highs, and the currency was getting decimated. That was pretty much the opposite of what was happening at the time in Brazil, where despite the global downturn, the economy was holding steady on the back of strong commodity pricing, lower interest rates, and winning the 2016 Summer Olympic bid. But that's was just it. All the good news had been baked into to Brazil (and all the bad news was embedded into the story in Mexico), so in terms of relative upside, Mexico made a lot more sense.

Imari Love does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.