These days, markets are even harder to predict than ever before. The wild value fluctuations we saw in 2020 haven’t gone away simply because we’ve turned the calendar page.
If anything, markets are likely to experience even more volatility this year as the COVID-19 epidemic enters the mass vaccination stage.
Travel and hospitality sectors will rely on how well they bounce back this summer—if people are able to travel and vacation safely, that is. Interest rates at practically zero will also impact the overall value of greenbacks as well.
Markets are always unpredictable. They’re especially unpredictable now. That means savvy investors should look at new ways to diversify and invest.
If money flows out of the market and into common alternative investments, you may find yourself paying retail prices on investments that don’t offer a significant return.This is just one of the many reasons why farmland investing makes sense. Farmland is resilient in almost any market condition, offers significant returns, and can be a better value proposition than popular alternatives like gold.
Plus, it’s never been easier to incorporate farmland into a balanced and resilient portfolio.
Investment Minimum: $15,000
Average Returns: 7% up to 13%
Promotion: No current promos
Farmland is the Right Hedge Against Market Risk
Major market swings began in 2019 and continued throughout 2020—both due to and in spite of the COVID-19 pandemic. Investors should expect more of the same as the world races to vaccinate its citizens, often with different levels of efficiency.
The world is watching and waiting to see how—and how long—these efforts take. Any sign of an answer can cause the market to move significantly.Farmland, by contrast, has a longstanding reputation for value no matter the market condition. Investors can expect a constancy rivaled only by bonds—but with a much higher target return than the interest on a Treasury Bill of any length.
With farmland, you’ll invest in a stable asset class that’s far from the ups and downs of current markets. This can help form the backbone of your portfolio’s hedging strategy in the months (and potentially years) ahead.
Farmland Value Retains Value Remarkably Well
One of the reasons farmland tends to stay stable is the necessity of food and agriculture despite any market condition. Whether the Dow Jones Industrial Average is low, high, or somewhere in between, people still need to eat.
For that, the country needs farms (and farmland to go with it).Farmland value has increased steadily since 2010. An acre of farmland cost $2,532 on average in 2010. Today's price tag is $3,160.
Aside from a dip during the 2008 recession and recovery, farmland value has risen consistently since the 1960s. Adding farmland to your portfolio means unlocking an even-keeled asset with years of stability.
This can be a major asset when there are few other stable investment opportunities paying a significant return.
Farmland investing, much like other forms of real estate, has a reputation for stable returns. But instead of searching for the right real estate investment, investing in farmland with FarmTogether brings the opportunities to you in an easy-to-use online investment platform.
Farmland is Inflation-Resistant
Inflation can make for a tricky time to invest, particularly if you’re looking for a diversification strategy. Consumer confidence and the value of the dollar can have a weighing effect on large swaths of your portfolio, be they directly tied to sectors or stocks primed to suffer from inflation.
Conservative investments—in the bond market, for example—fare even worse. Locking in a long-term bond with today’s interest rates means coming out worse for wear on your investment. Inflation is difficult to avoid, particularly if you’re confined to conventional market investments.
Farmland, on the other hand, has a history of gaining value during inflationary periods. Inflation drives up the price of household goods and agricultural products, which is why agricultural commodities tend to increase in value at this time.
This phenomenon means your farmland investment may increase in value too.
Farmland Offers a Value-Driven Alternative Investment
When markets look rocky, many investors head for the exits. Their destination, more often than not, is gold or other precious metals. Gold has long been considered the go-to for jittery investors who want to lock in some of their market gains with a steadier asset.
This has, for the most part, proven true: gold prices have increased from little more than $390 per ounce in March 2001 to nearly $1,850 per ounce in January 2021.
On the flipside, this means investing in gold may not give you much wiggle room to see your money appreciate. You also won’t get the kind of return you might have enjoyed with a similar investment only a handful of years ago.
This isn’t to say that gold isn’t one of the more recommended alternatives to deliver value. Rather, it may come with a significant retail price tag for most investors.
That’s why farmland might be a better fit: you’ll enjoy a similar investment trajectory but without paying a fortune for little exposure as a result. $10,000 worth of gold may only get you a few ounces; with FarmTogether, it can get you a few acres.
The Time is Right to Invest in Farmland
The global economy is in uncharted waters—a global pandemic mixed with unique market opportunities (and pitfalls) such as this has never existed before.
Investors should expect volatility as the norm, rather than the exception to it, in 2021. Finding shelter for your assets might be the order of the day, and without rock-solid indicators of when the storm will pass.
Smart investors have already begun to diversify their holdings. Even smarter investors are taking their time to sort through growth opportunities for the biggest potential return, rather than throwing money into conventional alternatives like gold and real estate.
FarmTogether’s value proposition is unlike any other common alternative investment: it combines the best of commodities and real estate in one, all while enjoying decades-long growth trends.If you want to learn more about farmland investing with FarmTogether, you can check out their live offerings here. Or, sign up and begin investing today.
Take control, diversify your portfolio, and increase your passive income by investing in farmland with FarmTogether’s all-in-one investment platform.