September 13, 2022
Investing in Farmland
In 2022, investors are seeing the traditional 60% stock / 40% bond portfolio suffering in a period of rising interest rates and soaring inflation. Stock markets globally have experienced lots of volatility. This type of market environment outlines the benefit of investing in real assets. These types of assets are uncorrelated with the equity and bond markets and provide a solid inflation hedge.
One example of a real asset is farmland, According to Forbes magazine, over the past 20 years, U.S. farmland has produced an annualized return of 11.0% per year, with significantly less volatility compared to the traditional 60/40 portfolio. Further, the correlation to other asset classes during the same period is low, providing great diversification benefits for investors.
Aside from being a solid investment, historical farmland returns have been positively correlated with inflation. Unfortunately, access to this asset class has been difficult for the average investor due to high minimum investment requirements. As a result, only large pension plans and institutional funds have been able to gain access.
Northfront specializes in alternative investments and provides access to these investments to individual investors. We understand the value of assets such as farmland and help provide the necessary exposure to your portfolio through our Alternative Asset Fund. If you would like to learn more about our approach and diversified investment portfolios, please connect with us.
About Northfront Financial
Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and Certified Financial Planner™ (CFP™) designations.