Motley Fool: Investors may look at Latin American E-commerce

E-commerce and financial technology (“fintech”) are set to grow robustly in Latin America in the coming years.

These two niches happen to be the core competencies of Latin American e-commerce and digital payments company MercadoLibre (Nasdaq: MELI) – sometimes referred to as the eBay of Latin America.

The company has been growing briskly in terms of both revenue and earnings.

In recent quarters, MercadoLibre’s profits have also started to increase as high-margin businesses such as advertising, credit and its third-party marketplace ramp up.

As a result, its stock popped by over 85% in 2023 and seems poised for more gains as the company delivers revenue growth and expands profit margins.

MercadoLibre has withstood challenges from competitors such as Amazon and Singapore’s Sea Limited, while capitalizing on the bankruptcy of Brazilian retailer Americanas.

It has a large opportunity in Latin America, where both the middle class and internet connectivity are expanding, and it’s branching out beyond its three core markets of Brazil, Mexico and Argentina.

The company has executed well across its portfolio of businesses and geographies, and the stock has delivered excellent returns since its 2007 initial public offering.

It appears reasonably priced at recent levels. (The Motley Fool owns shares of and has recommended MercadoLibre.)

Ask the Fool

Q. When investing for my kids, is it better to put the money in stocks, bonds or CDs? – B.P., Knoxville, Tennessee

A. It depends on how old they are and your goals.

For example, are they still quite young and not heading to college for many years? Or are they 16 and heading to college in a year or two? Or are they older, perhaps in their late 20s, and aiming to buy a home in a few years?

For long-term dollars that you can leave invested for at least five to 10 years, consider stocks, which have outperformed just about all alternatives over long periods.

You can invest in stocks easily via a low-fee, broad-market index fund, such as one based on the S&P 500.

It can also be good to invest in the stocks of a few companies your kids know and like. If you then follow them together, they’ll learn more about investing.

With shorter-term dollars that you’ll need within a few years, favor less-volatile investments, such as bonds, CDs or money market accounts. Learn more about U.S. savings bonds and Treasury bonds, bills and notes at TreasuryDirect.gov.

Q. What’s “front-running”? – R.A., Columbus, Ohio

It’s when someone invests with the aim of profiting from inside information that can affect the investment’s price. For instance, a mutual fund manager might buy a stock for her personal portfolio and then buy lots of it for her fund, which could drive the price up, giving her shares a boost.

Alternatively, a broker who knows that his firm will soon recommend a company might buy shares of it for himself. Some, but not all, kinds of front-running are illegal.

My Dumbest Investment

My most regrettable financial move was not going to Harvard Law School.

I would be making a mint if I’d accepted their acceptance. However, I hate working long hours, so maybe this was actually a good move. – Y., online

The Fool responds: It’s easy to think about – and possibly regret – how much income you gave up by not pursuing a particular career path, but there are many other factors to consider.

According to the Bureau of Labor Statistics, the recent average annual income for lawyers in America was $163,770.

That’s certainly appealing, but it’s an average (mean). Hundreds of thousands of lawyers earned less than that, while others earned more.

If you love law and what a legal practice entails, then law school would have been worth considering.

As you know, though, the job can require long hours and include many tedious tasks, such as poring through contracts with a fine-toothed comb.

Law school is typically a costly three-year program, with the average total cost topping $220,000, per the Education Data Initiative.

If you graduate and earn a lot, you might pay it off quickly.

If not, this debt could be a real burden. If you’re not best suited for law, there are plenty of other appealing career options, many of which can pay well – especially if you stand out and do great work.