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.
