New to Investing From Honduras

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ElectricalPeak88
Posts: 5
Joined: Sun Mar 25, 2018 8:55 pm

New to Investing From Honduras

Post by ElectricalPeak88 » Sun Apr 14, 2019 5:50 pm

Hello,

I live in Honduras and I am new at investing and don’t know what to do, so I thought I would ask here and maybe someone who is more seasoned could give me some advice so I can make the best decision.

I’ve been doing some research and I can’t come up with a good answer, my main question is should I invest the money I have in US Dollars or should I just stick with my local currency? Our currency, the Honduran Lempira devaluates every year against the dollar anywhere from 3% to 5%, 2012: 1USD = 19.21 HNL, right now 1 USD = 24.43 Lempiras. With the investment accounts available here I can get 5% annual return If I invest in US Dollars, but If I invest in my local currency, I can get 7% to 12% annual return, so my question is, is it better to invest in dollars because it appreciates against my currency, or should I invest in lempiras because I will get a higher rate of return?

My second question is, should I invest my money in a private pension plan run by the biggest banks here, they offer 9% to 12% annual depending on market returns but charge a 10% commission fee every time you make a deposit, which I will be making every month, but the interest you make isn’t taxed so you only pay that 10% fee and nothing else.

The other option are certificate of deposits(CD’S), they offer anywhere from 7% to 11% fixed, depending on the financial institution, they have no fees but the interest you make monthly is taxed 10% by the government and you are required to deposit 1 million lempiras ($42,000 USD) to get the highest interest rate, which I have, otherwise if you put in less you just get around 4-6% until you meet the requirement amount.

FYI Inflation at the end of 2018 in Honduras was 4%, up until march of 2019 it was up to 4.1%

Any advice or Insight would be greatly appreciated, Thank You!
Last edited by ElectricalPeak88 on Sun Apr 14, 2019 8:05 pm, edited 2 times in total.

skepticalobserver
Posts: 966
Joined: Tue Jul 29, 2014 11:29 am

Re: Investing In Honduras

Post by skepticalobserver » Sun Apr 14, 2019 7:59 pm

As a starting point here's the US State Department's assesment on investing in Honduras: https://www.state.gov/e/eb/rls/othr/ics ... 281761.htm

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Ged
Posts: 3732
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Re: New to Investing From Honduras

Post by Ged » Sun Apr 14, 2019 8:11 pm

I think safety of principal and liquidity should be considered as important if not more important than return.

Laurizas
Posts: 18
Joined: Mon Dec 31, 2018 4:44 am
Location: Lithuania

Re: New to Investing From Honduras

Post by Laurizas » Tue Apr 16, 2019 2:12 am

By looking at this graph I would invest in USD
Image

You said you don’t know what to do, so I suggest reading bogleheads wiki. You have to determine your investment goals, asset allocation etc.

I doubt that pension funds only charge you once while making a deposit. Usually they have other fees. If I were you, I would explore possibilities to invest outside of your country using International Brokers, Saxo or some other broker.

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