Financial and exchange rate crises in emerging countries during the last decade have generated increasing interest in the subject of contagion. In this paper we present evidence of spillover effects during the incubation of the Argentine crisis on two Latin American countries. As expected, our results indicate that informational shocks affected mainly Argentina. Even though we find evidence of contagion effects on Chile and Brazil during argentine-related announcements, the general evidence indicates that foreign investors did not rebalance their portfolios away from non-Argentine Latin American markets during the pre-crisis period. It indicates that foreign investors do not perceive Latin American countries as one fully integrated market.