When it comes to building wealth, many financial advisors will advise that it’s prudent to take your time and diversify your portfolio. Given that there will be inevitable periods of economic instability when you can’t readily predict the market’s activity, diversifying makes a lot of sense.
But where do you put your money when you are worried about maintaining your net worth in a turbulent world? A traditional roadmap to deploy assets can include agriculture. Now it’s time for you to consider using farmland investments as a hedge against inflation.
Examining different metrics of the country’s economic activity helps investors make comparisons about where to deploy assets in the face of inflation.
“You must invest in inflation hedges, and no other investment offers the long-term protection against inflation with so many other advantages as does farmland,” noted ThinkRealty. While you can’t find an investment that will align exactly with increases in inflation, agriculture gets you pretty close.
ThinkRealty explained that farmland “has a 70 percent correlation with the Consumer Price Index (CPI) and a 79.84 percent correlation with the Producer Price Index (PPI),” with research supported by the TIAA Center for Farmland Research at the University of Illinois.
