By: Yale Bock
Global citizens are currently captivated by the sporting event known as the World Cup, a once-in-four-years soccer tournament hosted by FIFA. Over 200 countries go through regional qualifying to earn the right to be among the final 48 contestants. Millions of people have traveled to North America to watch the games and enjoy the different cities across the continent. Historically, countries in South America have performed very well during this tournament, often winning it. Similarly, it is currently a region that needs to be considered for investment exposure in the future. Let’s take a quick look, shall we?
If we start with the reasons for investing, the most obvious are the large populations, abundance of natural resources, and the geographical advantages of being located very close to North America in the Western Hemisphere, and still able to export to other large continents like Africa, Europe, and Asia. The most notable challenges include political instability, questions about the legitimacy of the rule of law, volatile currencies, very low levels of per capita earnings power of citizens, elevated levels of poverty, and educational systems that don’t rank highly on a global scale.
The most obvious countries for investment are Brazil, Mexico, Argentina, and Chile.The former two have long been areas with great potential, but ultimately, their investment performance has been underwhelming. Consider this quote by Stefan Zweig (1941), who wrote: “Brazil, the country of the future… and always will be.” Brazil will hold national elections in October. Mexico has long been a socialist stronghold where the country suffers from problems with the rule of law and misallocation of resources, along with a poorly performing educational system.
The latter two countries are the most prominent examples of countries with potential for investment outperformance. A commitment to free markets, rule of law, deregulation, currency stability, and taking advantage of the vast natural resources in oil, gas, and copper makes them areas to strongly consider. With the recent change in political leadership in Colombia, it is also a country that should be looked at more closely. Here is a link to an article which discusses the countries even further- https://seekingalpha.com/article/4874300-from-reform-to-re-rating-south-america-emerging-investment-opportunity
A couple of other interesting tidbits globally include the multi-year weakness of the Japanese Yen and the growing efforts by the non- Iranian countries surrounding the Strait of Hormuz to find ways to ship products bypassing the Iranian side of the passage. The yen currently trades at a decade low against most major currencies and now resides at over 160 to the dollar. It is also only natural to think the neighbors of Iran are more than a little bit fed up with a country that does everything to create bedlam and take advantage of whatever perceived strength they possess.
Originally published on July 5, 2026 in YH&C Investments newsletter
PHOTO CREDIT: https://www.shutterstock.com/g/bobbyw
VIA SHUTTERSTOCK
DISCLOSURES
Y H & C Investments may have positions in companies mentioned in this newsletter. Nothing in the newsletter should be taken as an offer to buy or sell individual securities. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives.
