Dear Readers,

Risk and the perception of risk are two different things. We've been led to believe that the traditional stock markets are safe because they are large institutions, run by really smart people, regulated and overseen by the various government agencies in charge of protecting us. 

But hasn't investing in Wall Street become a lot like going to Las Vegas where the house always wins? Just look at the huge bonuses presented to tens of thousands of executives from companies that lost trillions of investor money. Madoff and many others like him simply slipped past examiners and the results have been cataclysmic for hundreds of thousands of investors and clients. It is obvious that regulation and oversight haven't helped the average investor much these past few years. And quite frankly, I'm not sure it ever did. 

Business is, or should be about serving clients. The great companies always do.  Credit default swaps on mortgage backed securities, who did they serve? Where was the client in this equation? Or was this simply a way to make money in the markets, from the markets. Gaming the system as it were. If so, it was destined to come crashing down. 

For the savvy investor, it always comes down to the basics of supply and demand. Companies which supply a product that people want will earn a profit for serving the needs of others. Great companies always focus on these basics and over the long term succeed.
 

But there is another critical factor for investors to consider and that is the stock market itself. The market follows the rules of supply and demand, perhaps doing so in its most pure form. 

Please follow me in this mind experiment. 

Baby Boomers hold over $40 trillion worth of stocks and bonds, or at least they did a couple years ago before the market revalued them. They plan to use these assets to fund their retirements. If that's the case, they must sell these stocks and bonds and turn them into cash to be spent at the grocery store, pharmacy, and golf course. 

The significant question we need to ponder seriously is, "Who will buy these stocks?" The Chinese, the Arabs, the next generation? Who? If you think stocks are on sale now, just wait. Unless there are huge buyers lined up, (there aren't) who want to buy these stocks at higher prices (not likely) over the next 10 to 15 years, the fire sale hasn't even begun. So what to do? 

Really, it boils down to just this: risk versus the perception of risk. 

Many people drive cars, yet are deathly afraid of flying. This is insane, because we all know that statistically flying is between 60 and 200 times safer than driving depending on how you measure it. Yet many people talk on their cell phone and change lanes all while speeding in traffic on the way to the airport. Then feel fear as they plane rolls down the runway. 

There are some great studies on why this is so, fascinating actually, but let it suffice, that this fear is irrational. But it is very real. Some people succumb to it and won't get on an airplane. Most of us however, if we have that fear, suck it up and get on the plane anyway. It is possible to get past this fear and get on with the business at hand. 

So how does this example tie back into investing? Simply that what appears or feels risky, may actually be a lot safer than what we know. For example, ownership of property in Latin America, or even ownership in a development company working in the region may seem like a great risk. But is it? Only an empirical examination will actually tell us. 

The plane is leaving, with or without you, and opportunity is on board. 

What if a small amount of due diligence on your part would uncover the facts and reality of such an investment? What if you examined this data under the light of objective scrutiny and it showed that it was indeed less risky to own overseas property or part of a development company than owning shares of big blue chip companies like AIG, CitiBank, GM, and GE down 50% from their 2007 highs. Are you ready to take action and "get on the plane anyway?" 

80 million boomers are just now beginning to sell off the vast $40 trillion holdings of securities they own. The price that they receive will be determined by the laws of supply and demand. But no matter what the price (likely lower) these folks will still have cash in hand and will want to spend it on their retirement. But with less cash, what options will they have for a quality retirement. 

The bottom line is that this huge group of baby boomers is about to retire over the next 20 years. Many of them, almost a quarter, have expressed an interest in living part of their retirement overseas. In addition to US retirees, nearly half (45%) of the Canadian boomers plan to spend at least a month or more outside Canada in retirement according to a TD Waterhouse survey last year. 

Surveys describe what might happen. Even more relevant is what people are actually doing right now. Today, over 500,000 retired US citizens already live outside the country,  many picking up their Social Security check at an embassy or consulate outside the United States. You see, this trend is not "going to happen." It is happening. 

The harsh reality is that retirees will have less money than they anticipated. How many more will consider the option of a life outside North America? Will they buy? Will they rent? Who is going to be their landlord? Who will own the home or condo they will buy? Why not you? 

Even better, who is going to own the company that develops the resort retirement communities and builds the homes and condominiums that they choose to call home?  Imagine owning a piece of the major company in the Latin America serving these retirees as they come south of the border looking for a new home with all the comforts of "back home." Do you think forward looking investors will make a nice return? Everyone who has served the Baby Boomers well in the past 60 years has enjoyed phenomenal success. This is simply the next stage. 

An E&Y report in 2008 shines light on the uncertainty many future retirees face of living longer than their retirement savings last. This will most certainly have more folks looking south of the border for the high quality, affordable retirement they've always dreamed of. If you'd like a copy of the E&Y study, let me know and I'll send it to you. 

Unfortunately, people who for 40 or more years have planned for a warm weather retirement, may no longer be able to afford a North American dream retirement in their golden years. Sure you can pick up a condo in South Florida for a song right now. But what does it cost to live there when you factor in taxes, insurance, HOA dues, food, entertainment, and all the other things you need to have a comfortable life. What kind of life can you have on $1200 - $1500 - $2000 per month in South Florida no matter what you paid for your condo? 

The major appeal for retirees looking south of the border is living in a country where a one-hour massage costs a mere $12.00, a full time maid costs less than $150 per month, steak and chicken is less than $1.00 per pound, and a movie and popcorn for two is less than $8.00. This translates into an affordable, high quality of life. A maid, what does that mean? No more chores ever. Time to play golf, relax in a hammock, get involved and work with a church or service organization making the lives of others better. Millions of retirees are going to say yes to this vision of retirement and you have the opportunity to serve them. 

Smart, forward looking investors will put themselves in the path of progress in the same way that Levi Strauss built hardware stores to serve the gold miners. More and more people will hear about the golden life south of the border and they will want to have it for themselves too. Old Levi ran a boring business of selling shovels, boots, and jeans. Boring, but exceptionally profitable. He served the needs of consumers and he got there first. You can too. 

You may already be tuned into the incredible opportunities outside the North America.  If so, you are ahead of the curve and have a huge advantage. Most folks will only consider something when necessity forces it. By being part of a business that will serve these arriving consumers, you can, just like Levi, provide something that is desperately desired and earn a nice profit as well. 

Our company, ECI Development is already serving these retiring Baby Boomers. Take a look below to see the unique selling proposition we have in the market place and be in touch if you'd like more information about the company. The trend is already happening. If you want to take advantage of the opportunity to be out in front, then you need to act now. We are. 

Be in touch. 

Michael Cobb                             
Chairman and CEO
www.ecidevelopment.com 

(See pasted below for ECI Overview) 

ECI Development - Overview 

One of the most successful retirement communities North America had a powerful vision. They wanted to provide real community to active senior adults, and then let the retiree decide what part of the United States they liked best. This is the Sun City brand, which developed its communities in the deserts of Arizona, along the coasts of Florida and California, the piedmonts of the east. 

This company knew how to build the services and amenities that everyone desired. They then offered clients the option to choose what type of climate and environment suited their needs and wants best. Their success has been unparalleled in the industry. 

ECI Development is taking this concept one step further by serving the millions of Baby Boomers right now searching for retirement options in Latin America. This is an already large market and it is growing quickly. 

The recent world economic downturn and the loss of vast sums of wealth in retirement accounts is further pushing this demographic to further explore ways to lower their cost of living without reducing their quality of life. In fact, living south of the border can provide an enhanced quality of life as long as the developer meets certain standards. 

North American consumers take for granted the basic comforts of reliable electricity, excellent water pressure, high speed bandwidth for internet, access to top notch medical care, and quality construction. In Latin America, many developers fail to provide even these basic services. The vast majority of projects in the region are one country, one location. They are often little more than a collection of lots with limited infrastructure. Most have few or no homes and residential product in place. These ghost towns are likely to remain just that. Boomer retirees want life, activities, neighbors, and community, something these projects cannot offer. 

ECI is unique because it delivers the excellent infrastructure needed for a high quality of life experience. Significant resources are invested up front for amenities like golf, tennis and health facilities. Build requirements ensure that community happens quickly. 

Furthermore ECI provides real choice for retirees where it matters, in location and climate selection. This is accomplished by developing properties in the various geographies of the region. Owners can choose from a home along the Pacific or Caribbean coasts, in the cool tropical mountains, or in the arid, high deserts of South America. 

Just like Sun City in North America, one geography doesn't fit all clients looking for a retirement home South-of-the-Border. Some folks prefer warm moist air, others dry arid climates, some like mountains and eternal spring, some the beach, some like to golf, others tennis or boating. ECI provides a high level of amenities and infrastructure, provides real product choice, and is setting new standards in the region. 

The Boomers are a discerning crowd and now demand retirement homes that serve their comfort needs and lifestyle wants.  ECI delivers the lifestyle and location choice people desire in retirement. You can join us in serving these baby boomers.  E-mail me now at mcobb@ecidevelopment.com to see how you can be involved too.