In recent years, more and more people are investing in and buying farmland. They are not doing this just because they want to enjoy agricultural life—though that is certainly a factor. Farmland also provides unique investment opportunities for individuals who are hesitant about the stock market. Here, we explain some of the top reasons you should consider investing in farmland:
Any kind of investment will have a certain amount of risk. This is especially the case when investing in the stock market. Stocks go up and down constantly, and while some may be comfortable with this level of volatility, others are not.
Farmland returns, on the other hand, are historically less volatile. As such, this will be a safe and low-risk investment.
Little correlation with the stock market
One of the reasons why farmland is less volatile is because it has little correlation with the stock market. In most cases, they don’t move in the same direction as stocks. You can have your farmland returns increase while the stock market is plunging. In fact, farmland has produced positive returns in the same years as the S&P 500 has lost value.
Farmland is an inflationary hedge
In today’s world, inflation is on everyone’s mind. While most of us consider inflation a bad thing (and it is in many cases), for some it can bring benefits. Those who invest in farmland are one of those lucky few. Farmland can actually benefit from inflation as inflation can increase acreage value and crop income.