“An Argentine friend here in Buenos Aires recently got a call from his broker,” writes Retirement Planning Guru Paul Terhorst.
“The broker is also Argentine but lives in New York and works for a large Swiss bank.
“‘Buy Argentine bonds,’ the broker recommended, specifically provincial bonds, those recently issued in dollars with a high effective yield.
“My friend replied, ‘Are you nuts? Argentina?’
“The broker said, ‘My Brazilian clients refuse to buy Brazilian bonds, but they buy Argentine bonds. My Chilean clients refuse Chilean bonds, and buy Brazilian bonds. American clients buy everything coming out of South America, yet very few of these clients have ever been to South America.’
“The point: The more you know about a country, the more nervous you’ll likely become about investing there.
“In my case, I’m American, and I’ve recently spent a lot of time in the United States. I’m convinced that the U.S. economy will underperform, that the fiscal deficits will cripple growth, that unemployment will remain high, that the dollar will weaken. I see all these terrible problems; I know the United States quite well.
“Then, yesterday, an Argentine friend told me, ‘Buy the U.S. The U.S. has a brilliant future.’
“This friend has been to the United States only twice, and only to receive medical care. While I hesitate, he jumps in.
“In the end, my Argentine friend bought the Argentine bonds. And I still invest in the United States.
“You may have doubts, too. You may fear a collapse in your host country, or in the United States, or in some other part of the world where you have investments.
“My advice: Ride the curve. In my experience, living abroad for 30 years, when you first come to a country, you think it’s great. You want to rush out and buy a house, a business, the local currency, whatever.
“Then, sometime later, usually after a couple of years, you’re fed up with the host country, think the economy is doomed, and feel desperate to sell and get out.
“Finally, though, the second period passes, too. Once again you become more comfortable with the host country and your new life abroad.
“You’ll see strengths and weaknesses, goods and bads, but with a more objective slant. You still may want to avoid Argentine, Brazilian, or other bonds. But you’ll be in a better position to make that decision.
“You’ll likely stay in this pleasant state for a good long while, at least until you’re bored and want to move on…”