David Gobaud
Startup Contributor

Investment Outlook for Latin America

By David Gobaud | Mon, 08/08/2022 - 10:00

The economic outlook for Latin America faces an upward challenge in 2022 due to several factors, such as the war between Russia and Ukraine, higher oil costs and global inflation. This is negatively affecting global growth, now estimated at 3.3 percent.

An average growth of 1.8 percent is predicted for the Latin American region in this context, where the conflict in Ukraine has heightened inflation, increasing financial volatility and costs. The economies of South America will grow by 1.5 percent, while Central America and Mexico will each grow 2.3 percent.

As the CEO of an investment fintech company, I cannot stress enough the multiple benefits that investing has for the population around the globe. Today, many people are hesitant when it comes to investing. Micro-investing might just be the answer regardless of our goal.

The hardest part of micro-investing is getting started. What we have learned in Passfolio, is that in Mexico, only 3 percent of people invest and have good financial discipline. The good news is that fintech startups are introducing investing solutions that encourage small or rather micro-investments.

Micro-investing is defined as the practice of putting away small sums of money toward long-term or short-term goals without having to give up any wealth or properties.

Micro-investing can be classified digitally into two categories, including micro-investing apps that allow investments as small as US$1, such as Passfolio, and spare-change investment apps that round-off your purchase to the nearest dollar amount and contribute the difference to your savings account.

We aim to become one of the best options when it comes to investing, allowing income diversification and helping users to have some financial stability by being able to trade in more than 6,000 American stocks, ETFs and cryptocurrencies combined with just US$1.

Passfolio's presence in Mexico helps address a gap between the ability to invest and access to investments in the country. According to data from the National Banking Commission in Mexico, there are only 1.3 million people in Mexico who invest in one of the 35 existing brokerage houses. That is less than 8 percent of the Mexican population.

Today, thanks to access to investments through platforms and fintech companies such as our company, investing is easier and can be done with as little as US$5. Now, thanks to PassEarn, Passfolio’s new interest-free program that yields between 5-7 percent annual returns in dollars, users can choose to transfer funds from other accounts to this new account that will be generating returns on a monthly basis.

Micro-investing apps offer a solution. Instead of having to pick individual investments, all you need to do is to pick a risk level, such as conservative, moderately conservative, moderate, or aggressive, and the app will automatically adjust your portfolio in accordance with your financial goals. Acorns, for example, features portfolios created by a Nobel-prize winning economist, so one can rest assured about the quality of portfolios.

Labor markets around the globe are showing slow signs of recovery and the employment pace during 2022 is declining. How to stay afloat amidst these uncertainties sometimes is entirely up to us. We are here to help our wealth and investments stay on top of the game.

Photo by:   David Gobaud