For some investors, farmland is terra firma—and profitable too.
Emerging players are snapping up land worldwide. World-class gurus like commodities kingpin Jim Rogers and hedge fund-luminary George Soros have been fueling demand, repeatedly citing rising demand and shrinking supply.
“Farmland is a theoretically safe, investment producing, inflation-protected hedge,” says Barton Biggs, the former Morgan Stanley strategist who now runs the hedge fund Traxis Partners.
The downside, he quickly adds, is that farmland is also “very illiquid" and a "complicated thing."
Farmland returns are nearly rock steady, though. Biggs pins them at 6 percent to 7 percent annually.
Measured by the NCREIF Farmland Returns Index , farmland handily beats the S&P 500 over the past ten years. Negative quarters for farmland are rare, making investments far less volatile than stocks.
Like other alternative investments, farmland is attractive, because it "doesn't correlate with equities ,” says Roger Nusbaum, chief investment officer at Your Source Financial in Phoenix.
There's also a current-events component to the investment equation.Page 1 of 4 | Next Page