Investing In Farmland, The Smartest Way To Invest In America’s Future

June 14, 2021

As a thoughtful investor, you have been considering various opportunities for where you can put your assets. This is because carefully thinking about your portfolio now could result in a much better outcome than if you rush or go more by your gut and emotions.

Some prefer to invest primarily in companies whose products or services they already own or use and have therefore vetted in terms of consumer preference.

That’s a reasonable approach. You find value in a particular company because of its technology or the vision of its founder, and that prompts you to invest, since you already know what their value proposition is. But there is another sector you are already familiar with, simply by eating meals every day, wearing clothes and more: Agriculture.

For many, investing in farmland is just about the smartest way you can invest in the future of America.

Hedge Against Inflation

Putting all your earnings into a standard savings account is a recipe for seeing your net worth plummet over time because of inflation. So one approach is to invest in agriculture.

Financial Poise observes that “inflation is the general increase in prices of goods and services over time, and farmland is an asset that is proven to be resistant to inflation and economic turmoil, as food is always in demand.”

So instead of hiding money under your mattress or leaving it in an unproductive bank account, your money might grow more for you by deploying some of it into agriculture.

Farmland Is Seen as an Excellent Way to Achieve Portfolio Diversification With High Returns

You may very well make decisions based on how well an investment can help diversify your portfolio.

The Corporate Finance Institute weighed in, reporting that “Adding farmlands to a portfolio of investments can help investors reduce the volatility of their investments because agricultural land has been shown to have a low correlation to the price movements of stocks and bonds.”

Meanwhile, putting your money into farmland is also viewed as way to achieve a consistently high rate of returns.

The CFI explains that “Agricultural land has outperformed other investments such as stocks and bonds on an annualized basis for the past 50 years.” Such consistent returns are seen as due to capital appreciation of the real estate itself, as well as farms being generally steady sources of income.

Farms are not like large corporations that can be raided and then dismantled with divisions being sold off to extract value. They remain intact entities under investment, holding onto value with less volatility.

Comparing Agriculture to Precious Metals

As an investor casting about for places to put money, you may be attracted to precious metals, such as gold. But as the Western Producer put it, “Gold, in any one year, could lose 20 or 30 percent. Farmland doesn’t do that.”

For context, it explained that “Agricultural land is less volatile because it’s harder for the average investor to own a piece of farmland.” Multiple investors owning fractional shares in land being farmed is seen as a stabilizing factor.

Aligning Your Future With the Future of Farms

If you feel a deep connection between your personal fortune and the progress of the United States, you’re not the only one.

Many people express a sense of patriotism by focusing their investments in American businesses, and farmland is a big part of this type of strategy. After all, there is a direct link between the vitality of a nation and the agriculture it raises. For more perspective on investing in farmland, explore US farmland investment opportunities today at FarmFundr.