Market Overview

Score 11.24% Returns in a 0 GDP World. Here's How.

Score 11.24% Returns in a 0 GDP World. Here's How.

The stock market has mostly recovered from the March coronavirus lows. The NASDAQ repeatedly set new all time highs in June and July. The S&P is hovering at all time highs. The value in the recession has mostly been gobbled up, and you have to take on the risk of a second fall in order to earn any profits from stocks today.

Instead of speculating, smart money is taking profits from the securities market and shoveling it into less risky investments that maintain a substantial upside. This favorable risk/reward metric can be achieved through low correlation with the stock market.

A World of 0 GDP

In an unprecedented move, the Federal Reserve (Fed) has promised to inflate U.S. markets. Artificial inflation improves the nominal value of assets, but it does not increase their value. The result is a purely psychological boost for investors who own stocks, real estate and other hard assets. The inevitable conclusion is cycle of boom and bust, price crash and synthetic reestablishment of those prices.

Moody’s Investors Service has already pegged India’s FY21 gross domestic product (GDP) growth at 0. China achieved 0 growth in Q1 2020. Both of these economies serve as more honest bellwethers for the highly manipulated U.S. economy. Many experts believe the U.S. would have achieved a record breaking contraction if not for the injection of trillions of dollars into the economy from the Fed. Most certainly more companies would have gone bankrupt — iconic brands like JCPenney, Chesapeake Energy, Hertz and Brooks Brothers might have been joined by Boeing, American Airlines, Dave & Busters and The Cheesecake Factory.

The Fed’s play has also thrown the bond market out of sync. Because the Fed is artificially holding up the values of companies, corporate bonds have lower yields than they should. Investors in this space are stuck in the bubble. Hopefully for them, the Fed’s trillions into the GDP balloon inflate it enough to ensure the numbers in the brokerage account don’t go down and make everyone feel poor.

Reaching Out to New Markets

To avoid market manipulation and false value propositions, it is advisable to move into markets that are not correlated with the mainstream commercial markets. Traditionally, these markets are exclusive — for good reason. Private markets are much better regulators of value than the Fed and American government have proven to be.

You might be excused for having limited access to the high end private art market or the market for collectible cars. These are examples of markets driven by exclusivity and scarcity, and not everyone has the budget for this even if they have access.

You also need an interest in the investments in order to make good investment decisions. This is great for people who naturally enjoy the avant garde or old machinery, but that’s not all of us.

Fortunately, technology is making it much easier to reach out to markets that are not so prohibitively exclusive, chief among them the agribusiness sector.

The Rise of Agribusiness

You may not have an interest in luxury cars or abstract paintings, but biology dictates everyone has an interest in food. The agribusiness industry meets all of the criteria of a resilience market — low correlation with stocks, a staple product everyone needs and consistently high returns. Agribusiness has returned more than 11% per annum for the past 50 years regardless of stock market movement.

There are many other advantages to agribusiness that you might want to know about. Let’s take a look:

  • Investing in scarcity: In the modern world, farming is an increasingly scarce resource. There are fewer people in the industry trying to provide food for the majority of the population. The UN has noted that farmland is a declining resource. Scarcity helps to assure consistent returns.
  • Low volatility: Agribusiness is a great investment regardless of your time horizon. Because the industry does not experience the volatility of the stock market, you never have to worry about a crash wiping you out just before retirement.
  • Avoids real estate bubbles: Farmland is real estate you don’t have to inflate to profit from. Low rates are good for farms. Currently, farmland rates resemble 2008 housing crisis lows
  • Social good: Instead of investing in a market with no tangible benefit to society at large, you are moving money where it is most needed. The coronavirus has devastated many people economically, and those people need access to more food, not luxury cars. Growing agribusiness gives farmers the incentive and the resources to expand their reach.
  • Better returns: Long term returns on farmland outpace gold, the S&P and AAA bonds.

From the Alternative to the Mainstream

FarmTogether is your connection to the returns and resilience that agribusiness offers. FarmTogether has done all of the heavy lifting for you, vetting businesses for operational viability and infrastructure. No investment is guaranteed, but you can count on the dedicated expertise at FarmTogether to present only the best agribusiness opportunities to you.

Choose your level of investment and the form of investment you make — crowdfunding or bespoke offerings. FarmTogether sources and manages land, so you can be sure that you are connecting with people who understand and love the industry.

Visit FarmTogether for more information and to read through the available offerings.


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Posted-In: Opinion