While many investors choose to focus their money on the stock market, there’s much to be said for considering farmland as a dependable way to build up your portfolio.
Stock market investors feel comfortable researching industries, companies, and funds, since these are familiar to them and their peers, family, and professional associates. Those who are unfamiliar with the world of farmland may not have given much thought to putting their money into this sector.
Yet risk-averse individuals will want to consider putting their cash into agriculture, given that inflationary trends will demand that you do something to hold onto the wealth you’ve built up. Here is insight into why you would want to invest in farmland today instead of stocks.
The fear of rising inflation motivates many people to learn more about investing in farmland. As noted by Barrons, farmland “is a real asset that performs well in inflationary environments, delivers stable returns over long holding periods, and exhibits low correlation to financial assets.”
It pointed out that while farmland in the United States offers an annual return of about 11.25% on average (over the past 25 years), the S&P 500 Index gained a mere 9.6% in this timeframe. Keep in mind that the S&P 500 is subject to variable returns, and it is at least 200% more volatile than farmland investments.
BTC Bank explains that as the global population continues to grow, experts predict we will need to boost the number of crops being raised at least 100% by 2050. And since just 7% of the surface of the world is useful for growing crops, farmland will be in short supply as demand for food increases.
Whether you purchase a farm outright or opt to invest through fractional ownership with other investors, you can feel more confident that your money will work hard for you out in the fields.
Prudent investors who want to improve their holdings and are faced with a decision about adding stocks or agriculture to the mix will want to keep in mind that eating food never goes out of style. Contrast the steady demand for food and other agricultural products with the ups and downs of the stock market, and you can see why agriculture is so attractive for building up wealth. Investing in farms should give you a sense of stability. The fact that you can also support such a vital part of the economy is a motivating factor for many investors.
With FarmFundr, you can explore agriculture investing in multiple ways. With fractional farm ownership, you can participate in buying a farm with others, when the land would otherwise be out of reach to you as an individual. We also help investors discover completely custom investments, where we locate and manage a property of their own. FarmFundr focuses on California agriculture because of its diversity and significance to the national economy.
We invite you to open a complimentary FarmFundr account today, so you can gain access to new investment opportunities.