Many individuals in Latin America with cash savings want to invest internationally, a report indicates, and they are among some of the world’s most confident investors.
Researchers found that among 4,000 Latin Americans surveyed in Brazil, Colombia, Chile and Mexico, 59% held their investable assets in cash, but the majority also feel this allocation is more than double what it should be.
The respondents want to make their money work harder for them and they are generally more willing to take on higher risk to make higher returns compared to other investors globally, BlackRock, the asset manager, finds in its annual Global Investor Pulse report, which polled over 27,000 people internationally.
Lower day-to-day living expenses make saving and investing easier in Latin America than the global average and many of those studied are more interested in stocks today than they were five years ago.
Just over half said they would like to be able to invest in different countries and stock markets, while only 13% had investments outside their home country.
Overall, the research found Latin America to be the world’s most optimistic and confident group when it comes to their savings and investment decision-making. Almost three-quarters of Latin Americans said they had a positive view of their financial future, particularly in Colombia (84%), compared with 56% of respondents globally. Nearly seven out of 10 were also confident about making the right savings and investment decisions.
The main concerns that participants identified were that the national economy would threaten their financial future, and the high cost of living. Worsening conditions in the job market were also a worry for many respondents.
Armando Senra, head of BlackRock’s Latin America & Iberia region, says that although Latin Americans are strongly motivated to be successful savers and investors they have fallen behind in some key planning areas, such as retirement.
“Making retirement a financial priority is essential, but Latin Americans need to make this commitment real by strengthening their savings and investing efforts,” says Senra.
While around two-thirds of Latin Americans have begun saving for retirement, the total amounts that they have saved typically equal just one to two years of their desired annual retirement income.
*Read the latest issue of Fund Global LATAM here.
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