More information on Hedging Against Inflation - Again, Consider Agriculture and Farmland Investments

European farmland investments - an ideal hedge against inflation

There have been a number of articles arguing that one way to hedge against inflation is to use Inflation linked bonds.  That is one option, but if you as an investor do that you are still subjecting yourself to credit risk from the government and your investment will still fluctuate daily in the bond market.

As we have suggested a number of times before - most recently in this post here - we believe agriculture investments are a far better way to hedge against inflation.  Like legendary investor Jim Rogers, we believe farmland investments are the ideal inflation hedge.  Farmland investments have a high positive correlation to inflation - and indeed farmland is often described as "gold with yield" - which is why Jim Rogers frequently advocates farmland as an investment.  Jim Rogers that the agriculture investments sector will be the place to be in the decades ahead, especially as we run out of farmers.  

Whilst many people believe that only large institutional investors can access the farmland access class, as we explained earlier it is now possible for individuals to invest in farmland as well!  To learn more about GreenWorld's options for investing in farmland, please contact us at info@greenworldbvi.com or ring us on  +44-20-3286-2975.  GreenWorld offers two new agricultural land investments, our farmland investment in Europe and our African farmland investment

Another Reason to Follow Jim Rogers into Alternative Agriculture Investments - Soaring Food Prices

Investment in farmland justified by high food prices

As we have noted in a number of previous posts - including here and here -  our all time favorite investor Jim Rogers has frequently opined on the fantastic long-term growth prospects of agriculture and farmland investments.  For those who need more convincing, consider the long term trend in global food prices.

After remaining largely flat from 1990 - 2005, they have exploded the last few years and we at GreenWorld continue to expect them to trend higher.  From a political perspective, an unfortunate side effect of high food prices has been political instability in many developing countries, as citizens demand that their governments' solve this problem.  From an investing perspective however, savvy investors who look at global macro trends can easily see that this situation offers a powerful rationale for investing in agriculture and farmland.  For those interested in following Jim Rogers into farmland investments, GreenWorld have recently launched two new agricultural land investments, our farmland investment in Europe and our African farmland investment. 

Use Farmland Investing as an Inflation Hedge as a Major Financial Magazine Calls for ECB to Print Euros

In our previous post, we noted that investors should consider using farmland as a hedge against inflation.  Now, we see a major financial magazine in the US explicitly calling for the ECB to print Euros.   This is actually pretty scary stuff in our opinion, especially if you consider the already swollen ECB balance sheet below.  As we noted previously, Jim Rogers loves farmland investments as an inflation hedge, and we at GreenWorld believe that this same option for using farmland as alternative agriculture investments should be available to retail investors.  If you want to pursue this option, consider one of GreenWorld's farmland investing options: African Farmland Investment or European Farmland Investment in Lithuania.

European Central Bank has already printed huge amounts of new money - make sure to hedge against inflation

 

Farmland as an Investment to Hedge Against Inflation

In looking for a reason that farmland as an investment makes good sense, consider the graph below.  As is clearly seen, the balance sheets of central banks have trended steadily upwards that last few years.  It seems inevitable that at some point all of this newly created money will enter the real economy.  Farmland investments provide an excellent way to hedge against inflation, as farmland is a real, tangible asset, and no more of it can be be printed into existence by central banks.  As we discussed in our post introducing farmland as an investment, we pointed out that in addition to acting as an excellent inflation hedge, farmland also provides regular income and is an excellent way to play the continued high prices of agricultural commodities.  Whilst investments in farmland have previously been limited to institutional investors, as we pointed out in a previous post on this blog, it is now possible for retail investors to invest in farmland too!

Jim Rogers: "If you're smart, put your money into anything related to agriculture"

Jim Rogers in UAE - Buy Agriculture and Farmland

Jim Rogers was in the UAE recently, and he recently gave an interview with the newspaper Gulf News.  Once again, Jim Rogers turned to agriculture and farmland investments as his top recommendation.  In his typical fashion, Jim Rogers again noted that agriculture and farmland as an investment is a great value:

"Nobody wants to farm any more. Yet there are more people than even now. Seven billion of us....Fewer and fewer people are producing more and more food for more and more of us. That's only going to get worse over the next 20 or 30 years. So if you're smart, put your money into anything related to agriculture."

Not surprisingly, there have been a number of farmland investment funds opened recently (see yesterday's post on the newest farmland fund launched), as institutional investors pile into the asset class.  There are also agricultural farmland investments open to individuals now.

New Farmland Investment Fund "The Future of Institutional Investing" - Institutional Investor Magazine

Swedish farmland fund investor AP2

We recently came across a very interesting article in the magazine Institutional Investor.  The article, written by a senior research associate at Oxford University, notes that the huge pension fund in TIAA-CREF in the United States has recently launched a new farmland investment fund called TIAA-CREF Global Agriculture.  The fund is capitalized by a number of large Canadian and European institutional investors, including AP2 in Sweden, British Columbia Investment Management Corporation (bcIMC) in Canada, and  Caisse de dépôt et placement du Québec (Caisse) in Canada. 


What we found interesting is that one of the areas where the new fund will invest is in Australian farmland, which makes sense from our perspective as GreenWorld have long seen fantastic value in Australian agriculture investments, which we discussed in a previous post.  As our previous post notes, long time agriculture and farmland investor Jim Rogers also has a farmland fund company focused on Australian farming and agricultural land.

Whilst the TIAA and the Jim Rogers farmland funds are obviously focused on huge institutional investors, GreenWorld's projects - such as our farmland investment in Lithuania in Eastern Europe and our African farmland investment - have low enough minimums that they are easily accessible by individual investors.  For those with UK SIPPs, all of GreenWorld's farmland investments are SIPP eligible.

For those interested, here is the link to the article for the new TIAA farmland fund.

Benefit from Farmland Investments as Wheat Price Skyrockets

Wheat Farmland Investments Benefit from Price of Wheat

As we have mentioned before, GreenWorld offer two investments in farmland where the anchor crop involved is wheat.  These two are:  

• Farmland Investment in Europe
• Farmland Investment in Australia

Most of the investment opportunities in farmland are actually designed as farmland funds, usually hedge funds with huge minimum investment requirements as well as the usual the usual 2% management fee plus 20% of the profits.  All of GreenWorld's investments in farmland, by contrast, are targeted at individuals with low enough minimums that retail investors can participate, AND there are no ongoing costs whatsoever.

The reason we mention our two wheat farmland investments now is that the price of wheat has shot to the moon, up 17% just in the last week.  6From the perspective of those investing in farmland that produces wheat as its core crop, this naturally presents an opportunity to obtain a much higher dividend yield when the crop is sold into the marketplace.   For those not interested in running a farm, we have mentioned previously the fact that GreenWorld's farmland investments are purely passive ones, with everything from the planting to the sale of crops done for the investor.

Please feel free to contact us at info@greenworldbvi.com if you are interested to participate in the explosive price gains in wheat through our wheat farmland investments.