Farmland ETF

SammyBlackstar | Sep 20, 2011 |

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Farmland ETF

There are many reasons to want to invest in a farmland exchange traded fund. as more people are born it's going to become a lot more expensive to farm and the value of the land will rise. The problem with investing in just farmland is that you are over weighting your portfolio into just one area. When you invest in anything especially from in real estate, you wanna make sure that you completely hedged your risk by either spreading your assets over many different stocks are in many different sectors. Since we're talking about farmland exchange traded funds then we can only really choose between different forms of lands in different countries.

The best benefits of investing in farmland exchange traded funds is that you are technically investing in land. An example of how investing in the farm land has a hidden asset is to point to when Boeing teamed up with the United States government and built huge airfields in Kansas.

Investing in farmland has been one of the most well guarded secrets of conservative investing. In the book “The Intelligent Investor” it is pointed out that a lot of everyday investments are not glamorous so people will not invest in them. One of the major stumbling blocks that happened in the year 2001 when everyone jumped onto the Dot Com stocks and completely missed the available investments in real estate. Just take a look of the stock URE.

URE is an extremely well performing stock that only got really hit by the recent recession. If you look at the long-term graph of URE it does not look very pretty because it was only brought to market at the end of 2008 directly at the height of the housing crisis. URE is proof that the real estate market bottomed out in the beginning of 2009.

There are no real specific farmland ETFs to invest in on the market. Usually you don't want to invest just in farm land because of all the factors that attribute to farm profitability. URE is one of the best meters of real estate prices, including farm lands.

On a side note if you're interested in farmland exchange traded funds than you may also be interested in bonds directly tied to real estate. You will basically hedge your portfolio the exact same way except bonds are a lot easier to sell and are not as volatile as exchange traded funds. In some countries owning bonds can be tax deductible as apposed to dividends or capital gains.