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Why farmland now? Amidst unprecedented market volatility

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Why farmland now?

Financial markets are responding to the current limited visibility and uncertainty, both severely exacerbated by the coronavirus pandemic, by retreating towards safe haven investments such as U.S. treasuries (where yields have declined below 1%), gold and certain currencies (e.g. the U.S. dollar). A compelling alternative prior the virus outbreak, and made more so by coronavirus, is farmland. Farmland has a history of exhibiting unique value durability and income levels through economic downturns.

Historically, farmland has been uncorrelated to the economic cycle and experiences substantially less volatility compared with broad market indices and traditional asset classes. Westchester does not anticipate that farmland will behave substantially differently to current market conditions than it has to analogous market precedents. Farmland has a history of preserving capital in times of economic downturns and is currently delivering annual income returns above government bond yields in developed countries.

Source: Nuveen

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About Alejandro Cabrera

Alejandro's expertise fits well with his Special Projects position within GTSA. His cross-cultural international business experience working along aside large foreign companies in Argentina, Brazil, Chile and Uruguay giving expert advice related to M&A and Joint Venture negotiations. He is fluent in English, Spanish, French and Portuguese

Post available in: English

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