The Federal Reserve of Dallas noted that Mexico has overtaken China as the largest trading partner and with China’ deteriorating demographics, recent spat with Apple and de-globalization & re-shoring is it time to set sail for new horizons?
We have been looking at Mexican stocks and ETFs. We like the progress ETF EWW has made in the past few years moving up at a steady pace from a COVID low of $28 to $59 recently.
What are the pros of Mexican stocks and EWW?
- De-globalization and re-shoring favors Mexico as it is near the United States
- Demographics – Younger set of workers and population growth able to provide long term workers
- Lower costs – Labor and goods & services cheaper
What are the cons?
- Politics – Mexico seems to frequently shift from left to right and back to left leaning politics
- Inflation – Mexico has been hit hard by inflation and while that has been moderating it may resume climbing as more re-shoring to Mexico takes place.
- Violence/Crime – Mexico seems to go through periods of crime & violence whenever cartels fight for territory which makes the country periodically dangerous.
At the next market correction for EWW, we may pick up a few shares and start a small position so stay tuned, stay profitable and stay solvent…