Is Mexican Market Ready To Ride El Toro? NAFTA, a new president, Citigroup's big bet may signal faster growth.(MAKING MONEY IN MUTUALS)(INVESTMENT TRENDS)

Byline: Ken Hoover

Mexico seemed on the verge of collapse in 1994. The peso was devalued. The economy was tanking.

But that was then and this is now. The North American Free Trade Agreement became law that year. NAFTA brought in an era of fast growth in manufacturing. Plants near the U.S. border started to bustle. And it stimulated Mexico's export industries.

A new president, Vicente Fox, broke a 70-year hold on politics by the rulingparty. He won election last July by promising a free-market economy.

Then a real blockbuster hit on May 17: Citigroup said it will buy Banacci, one of Mexico's biggest banks, for $12.5 billion in cash and stock.

That amount equals last year's entire foreign investment in Mexico. Citigroup's move wouldn't have been possible a few years ago. The banks have new laws and Fox's policies to thank.

U.S. investors are usually better off looking for opportunities at home. Butit doesn't hurt to understand what's going on abroad.