The Chilean economy is in trouble. According to Bloomberg, the Central Bank is not too optimistic about positive growth in the following year, either. Policy makers said, "There is a greater than anticipated deterioration in the natural resources sectors, especially mining, because of production cuts amid falling copper prices. The growth revision is explained mainly because of the deterioration of the external scenario."

However, it is during such dire circumstances that has made the timing right for people to invest in the country.

Why is this so?

According to Seeking Alpha, at this point, the MSCI Chile Gross Index already lost -16.58 percent, and the country is down -50.64% since its April 2011 peak. That being said, the downturn of a particular portfolio does not automatically mean that it should be eliminated.

The outlet pointed out that investments are volatile, and the more volatile an asset is, the greater the rebalancing bonus. As Marotta On Money pointed out, rebalancing is when one buys and sells assets in order to move a portfolio and align it with its original target allocation. If this is done right, it can boost returns and lower volatility.

Rebalancing, according to Marotta, can increase returns because the volatility of the market can make it difficult, if not impossible, to predict the class performance of assets. An asset which recently went down can go up just as easily. Therefore, rebalancing properly is the best chance of boosting return investments, as will be the case when investing in Chile.

That being said, the more volatile and less correlated your assets are, the more likely it is that you're going to get the rebalancing bonus from your portfolio.

To put in actual numbers, the S%P 500 Total Return in 1988 had a 1,540.25% appreciation, averaging 10.28% annually. However, while it looked like it had a great growth in that time period, it also experienced an entire decade drop that went as low as -29.48 percent. Similarly, in a 30-month period, it got to its all time low at -43.75 percent.

Yet in the same time period, Chile was able to get a 3,585.25% appreciation value, which led an amount of $10,000 to $368,524 and averaging at 13.75 annually.

As it is with any other investment, there will be risks in investing in a country with a struggling economy. However, when the situation in Chile does turn around, investors will be able to reap in benefits that many, at this point, could only hope to gain.

What do you think about investing in Chile?