Farmland Investment - Why There Is A
Growing Interest In Farmland Investment
There are a lot of people investing in farmland these days, and more arriving to the scene everyday. But what has prompted this rush toward farmland, and is farmland an appropriate investment for you and your family? If you’ve been following the stock market and had your money invested in market-dependent portfolios and investment funds, you may have already seen a large portion of your money disappear. But if you were invested in farmland, you’d be very happy with your consistent annual returns. Let’s take a look at some of the other reasons people are gravitating towards farmland.
One of the simplest reasons, but a compelling one, is the dynamics of supply and demand. The world population is growing everyday, but the amount of farmland isn’t. With a much higher global demand for food, farmers are going to quickly become some of the world’s more valued citizens, and their land will be equally valuable. Not only are there more people looking to be fed, but they are also looking for richer diets. Those in emerging nations no longer want to eat rice or local grains, but are looking for meat, which takes about 7x as much grain to produce. Much of this grain is imported from North America.
Farmland, and particularly Canadian farmland, has been historically undervalued for a long time now. Despite the fact that it yields a very consistent return on investment every year (in some places as high as 9%), it has been overlooked by many up until now. But with the volatility of stocks and bonds and the dubiousness of the US dollar, many are turning their attention back to farmland at last, considering it alongside other hard assets like gold and silver as the best place for their money in a time when inflation could be a short step away.
Speaking of inflation, there are few inflation hedges more powerful than farmland. Although it isn’t a very liquid asset, it is a powerful hedge against the growing worries of inflation and could ensure that you survive many of the dramatic market fluctuations that seem incumbent. In fact, with fears of hyperinflation circulating and the weakening of the USD in international circles, farmland seems like a very sound investment indeed.
Farmland is definitely a rising interest in North America, as the past year has seen a lot of people gravitating towards farmland investment. But investing in farmland isn’t always straightforward. Not all farmland is created equally and it’s important that you know what you’re getting into before you invest. Just as important as the decision to invest in farmland is the ability to know where to invest, how to invest and when to change your investment strategy. If you’re interested in farmland investment and would like to know more, contact us today.
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