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First, we're going to talk a little bit about farmland. Why would you want to invest in farmland?
It's a hard asset has historically has appreciated in value and thrown off a favorable dividend compared to stocks, which are valued on future cash flows and not necessarily underlying company assets.
Bonds, again, are based on the ability of companies to execute and the ability to pay future debt.
Real estate is similar to land, but with the assets depreciate. And cash, which is where a lot of people unfortunately have money parked these days. Returns for savings accounts today are low if anything, and inflation works against you.
So what has this meant for the actual performance of farmland?
Many of you have seen this on our website. Not only is farmland structurally attractive, it has historically performed well and had low volatility.
So on the Y axis, or on the left-hand side or on the up-and-down, is growth rate. The X axis left-to-right is volatility, or how much the price of that swings around each year. So in a perfect world, you have something completely in the top left corner, and in the worst-case world, you have something in the bottom right corner.
Essentially what this chart tells you is that farmland has had an incredibly attractive return profile with low fluctuations in price over long periods of time.
This video is a segment of a longer introductory webinar covering farmland as an investment, how AcreTrader works, and common questions asked by new investors. You can view the webinar in its entirety, or go to the next video in the series.
Note: The information above is not intended as investment advice. Past performance is no guarantee of future results. For additional risk disclosures regarding farmland investing and the risks of investing on AcreTrader, please see individual farm offering pages as well as our terms and conditions.