Long before the COVID-19 crisis swept the globe, we urged our friends, family and Alliance members to invest in farmland.
Sure, when we first published our article on the top five reasons to invest in farmland back in early January 2020, we couldn’t have imagined the economic upheaval the looming global pandemic would cause.
After all, it was before China’s decision to shut down cities with millions of people. It was before WHO declared the coronavirus outbreak a pandemic. It was before our societies were brought to a standstill and our rates of unemployment soared.
What we did know, even back then, is that pandemic or not, farmland is and likely always will be a safe and reliable asset class. It was true during those rosy pre-pandemic days of (comparative) economic stability, and it’s true now that the global economy has taken a nosedive.
But hey, we’re not here to say, “We told you so” (even though we did)....
Chocolate or vanilla?
Gryffindor or Slytherin?
Row crops or permanent crops?
These are some of life’s quintessential conundrums. But while the first two questions have straightforward answers (chocolate and Gryffindor, clearly), choosing between investing in row or permanent crops isn’t so straightforward.
Before I break down the answer to this classic investor stumper, let me lay the foundation:
In the exciting, lucrative world of agricultural investing, there are essentially two different categories of assets: Row crops and permanent crops. Let’s talk a little bit about each one:
Our Pineapple Farm Investment in Panama
These are crops that are planted on a seasonal or yearly basis—think wheat, barley, cotton, and corn in the U.S. or our amazing pineapples in Panama. The name “row crops” comes from the way these crops are laid in condensed, machine-planted rows.
The best thing about investing in...
Karen and I have talked a lot over the last few years about our Maslow’s Hierarchy of Needs Investment Strategies, our thesis being that everyone needs healthy food and affordable shelter, no matter the market conditions:
And also the reasons why Investing in agriculture gives us a great hedge against the volatile stock market.
But this Covid-19 Black Swan is challenging all investor assumptions at the present time. Nobody can predict how much Helicopter Money will be dished out to soften the blow of the economic shutdown or what that means for the shape of the economic recovery.
So we decided to delve a little into the actual investments we hold and discuss any early indications as to the impact of Covid-19 on our portfolio. In Part 1, I’m going to be discussing our Panama Golden Pineapple investment in Panama, Part 2 is our agriculture investments in Colombia and then Part 3 will be a focus on our Multifamily investments in the US.
Let’s get to it. Starting in...
Karen and I have spent most of the last decade following a focused plan to properly globally diversify our wealth rather than turning a blind eye to the unrest both within the US as much as, if not more so than, beyond our borders.
So, we’ve steadily taken some healthy stock market gains off the table and transferred most of that capital from the very sentiment-driven volatility of the stock market into what we believe is safer harbor in hard assets - primarily real estate-backed assets. For us, this means a portfolio that has included: single family homes, multifamily apartments, mobile home parks, and other syndicated real estate-based investments.
Our bet on real estate has given us many advantages over investing in stocks, bonds, or mutual funds; it offers predictable cash-flow, appreciates in value thus keeping up with inflation, provides higher returns due to leverage, and offers equity growth through debt reduction.
Then about 5 years ago, we opened our eyes to...
10 years ago, if you’d have told us that we'd have more than 25% of our wealth in organic farmland and agriculture investments today, we’d have called you crazy!
But here we are and we sleep well at night knowing that even when the stock market corrects, people are still gonna eat, drink, and use products made from coconuts!
Where is your wealth invested? If you have pension, IRA or cash invested in the stock market today and want to learn about protecting and growing that wealth using Agriculture, please comment below