The stock market often steals the limelight in the bustling world of investing. Yet over the past three decades, another contender has quietly overtaken the stock. This is not gold, real estate or bonds. It is agricultural land. This asset class not only averaged an 11% annual return, outperforming stocks, but also did so without a down calendar year.
The power of investing in farmland
Farmland is a unique asset class that meets the first basic human need: food. As the world’s population continues to increase, the demand for food is increasing and, consequently, so is the demand for agricultural land. In contrast, the supply of agricultural land is decreasing due to urbanization and climate change. This imbalance between supply and demand creates a favorable environment for investment in farmland.
Interestingly, over the last 30 years, farmland has outperformed stocks, with zero calendar year declines. This implies that investments in farmland have consistently produced positive returns year after year, regardless of the economic climate. This level of stability is a rarity in the investment world, making farmland a valuable addition to any investment portfolio.
The appeal to high-profile investors
The potential of investing in farmland has not been lost on high-profile investors. For example, Bill Gates, one of the richest individuals in the world, has purchased a significant amount of agricultural land. His investment strategy emphasizes the potential of farmland as a stable and profitable investment.
The role of financial advisors
Given the potential of farmland investing, it is surprising that many financial advisors have not recommended this asset class to their clients. If your financial advisor hasn’t suggested farmland, it’s worth asking.
They may not be aware of the potential of investing in farmland or may not have access to suitable investment opportunities. Regardless of the reason, it’s important to have a conversation with your financial advisor about this overlooked asset class.
The new generation of financial advisors
In the modern investment landscape, having a financial advisor who is educated, sophisticated and acts as a fiduciary is critical. These advisors understand the potential of non-traditional asset classes such as farmland and can provide access to suitable investment opportunities.
These advisors are not your typical financial advisors. They are fiduciaries, which means they are legally obligated to act in your best interests. They are also educated and sophisticated, which allows them to navigate the complex world of investing and identify promising opportunities.
Conclusion
Bottom line, farmland is a unique asset class that has outperformed stocks over the past 30 years without a negative calendar year. As the world’s population continues to grow and the supply of agricultural land dwindles, demand for this asset class is expected to increase.
If your financial advisor hasn’t recommended farmland to you, it’s time to ask yourself why. With the right financial advisor you can harness the potential of farmland investments and diversify your investment portfolio. After all, in the world of investing, it’s not just about stocks and bonds. There is a whole world of opportunities and farmland is one of them.
Frequent questions
Q. What makes farmland a unique asset class?
Farmland meets the basic human need: food. As the world’s population continues to increase, the demand for food is increasing, as is the demand for agricultural land. In contrast, the supply of agricultural land is decreasing due to urbanization and climate change. This imbalance between supply and demand creates a favorable environment for investment in farmland.
Q. How has farmland performed versus inventory?
Farmland has outperformed stocks in 30 years with zero calendar years down. This implies that investments in farmland have consistently produced positive returns year after year, regardless of the economic climate.
Q. Why are high-profile investors interested in farmland?
The potential of investing in farmland has not been lost on high-profile investors. For example, Bill Gates, one of the richest individuals in the world, has purchased significant agricultural land. His investment strategy emphasizes the potential of farmland as a stable and profitable investment.
Q. Why might a financial advisor not recommend investments in farmland?
They may not be aware of the potential of investing in farmland or may not have access to suitable investment opportunities. Regardless of the reason, it’s essential to talk to your financial advisor about this overlooked asset class.
Q. What qualities should a modern financial advisor possess?
In the modern investment landscape, having a financial advisor who is educated, sophisticated and acts as a fiduciary is critical. These advisors understand the potential of non-traditional asset classes such as farmland and can provide access to suitable investment opportunities.
Q. Why should I consider farmland as part of my investment portfolio?
As the world’s population continues to grow and the supply of agricultural land dwindles, demand for this asset class is expected to increase. If your financial advisor hasn’t recommended farmland to you, it’s time to ask yourself why. With the right financial advisor you can harness the potential of farmland investments and diversify your investment portfolio.
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