As the real estate market in the US takes a nose dive, alternative investments like Costa Rica real estate could keep you afloat and in the sun! In times like this it’s good to have an alternative to futures, options, and hedge funds. The real estate market in Costa Rica is said to be one of the most stable in the world. It has been quietly booming for a few years and is expected to continue on its path.

What makes Costa Rica real estate such a promising investment?

About 15 years ago, you could buy a piece of land 50 meters from a beach of powder white sand and aqua blue water for $10,000 and it would be worth $500,000 today. There are still investment opportunities like this available in undeveloped costal areas, and up and coming trendy tourist destination. Although there are fewer than in the past, steals like this can still be found.

But more importantly, foreigners continue to move to Costa Rica, bringing their savings with them. Many are retiring or buying a second home, some are retiring young and some are coming to do business. There are several reasons for the influx. Property is cheaper than in the US, as is the cost of living, and a familiar standard of living can be maintained with the added benefit of beautiful beaches.

Furthermore, in 2010 the baby-boom generation will start to turn 65 and retire. Baby-boomers will retreat from their failing retirement plans and insufficient Medicare system and move to independent retirement in the sun. Costa Rica will become the new Florida, and you can already see the retirement developments going up and banking services for transferring Medicare checks.

Real estate has always been a great investment in terms of providing cash flow, assets and tax breaks. With the US market in the dumps, Costa Rica offers the opportunity to invest in a new growth market, in a country with a stable economy, and a friendly foreign policy. Costa Rica real estate is an excellent alternative investment offering high returns with low risk.

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With roots that date back to the 1930s, value investing is a price-driven discipline that seeks companies whose shares are selling at a discount to their true, or intrinsic, value.

While growth-oriented investors focus on firms whose earnings are growing at a rapid pace, a quality that makes them highly sought after, value investors seek companies that are temporarily out of favor. Their shares may be depressed due to factors ranging from company-specific issues to shifting investor sentiment, poor economic conditions, cyclical trends or an overall market decline. Sometimes they’re being ignored by the market for no good reason.

Over the past 25 years, three factors have amply made the case for the value style of investing: performance, diversification and risk control.

* Performance: First and foremost, value investing as a strategy has done well over time, rewarding investors with strong risk-adjusted performance. That has certainly been true over the past quarter-century.

Additionally, it is important to note that dividends have and continue to be a significant component of the stock market’s total returns – and particularly those of value stocks. In fact, according to Ibbotson Associates, a leading authority on asset allocation, dividends contributed, on average, 44 percent of the stock market’s total return from 1926 through 2003.

Diversification: Over time, value and growth stocks have tended to move in different cycles. When growth stocks are in favor, they tend to outperform value shares, and vice versa. That knowledge encourages many investors to construct portfolios employing both value and growth strategies, helping to ensure that they have equity investment with the potential to perform in changing market environments.

More to the point, the value strategy has more than held its own against its growth counterpart. Value’s outperformance has been particularly pronounced in recent years. From March 2000 through December 2004, value stocks, as measured by the Russell 1000 Value index, topped their growth counterparts as measured by the Russell 1000 Growth index by nearly 17.5 percentage points annualized.

* Risk control: By their nature, value stocks generally tend to be less volatile than their growth counterparts. In addition, because their shares are typically selling at depressed prices, value firms are better positioned to withstand market declines. Meanwhile, shares of growth companies normally have higher earnings expectations built into their prices and thus are subject to wider price swings as those expectations change.

American Century introduced its first value portfolio in 1993, complementing its long-standing efforts in the growth field by offering equity investors a lower-risk investment style. More than 11 years later, American Century’s stable of value offerings has grown to six funds, totaling more than $14 billion in assets.

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