Inflation is one of the most important factors for economies. Inflation, which does not pose any risk when it is low, becomes a threat to the whole economy when it starts to rise. This threat also greatly affects investors. For investments not to melt in the face of inflation, it is necessary to turn to the right options. Agricultural lands that have come to the fore lately can be a good option at this point. So, is farmland the right investment during inflation?
Inflation simply means an increase in prices. Inflation is defined as an increase in the prices of products or services that remain the same. To measure inflation, governments make a basket of different products and services and examine the increase in the price of this basket. Inflation is calculated according to the rate of increase.
Inflation can have different causes. The increase in product and service costs and the increase in demand are the most important reasons. Apart from these, there are different reasons. Factors such as consumers' expectations of price increases and credit expansion can also be expressed as reasons for inflation. However, whatever the reason, high inflation is a serious threat to countries and investors.
Inflation affects earnings from investments made. The effect here is usually related to purchasing power. The income you will gain because of an investment you make offers you a life with a certain standard. But even if your earnings stay the same with inflation, you have to pay more for that standard of living. Therefore, your investments begin to not fully meet your expectations.
Investors' diversification of portfolios during the inflation period is shown as one of the most important solutions. At this point, agricultural investments must also be taken into account. Agricultural investments that you will make by using professional services will ensure the diversification of your portfolio. Apart from that, you can be sure that it will bring you different advantages.
Agricultural lands are one of the investment tools that provide effective protection against inflation. Agricultural investments made correctly have always provided effective protection against inflation. To put it more clearly, agricultural lands increased more than inflation, making investors happy.
In a detailed study of a research company covering the years 1960 to 2012, it is seen that agricultural lands protect against inflation. According to the study, agricultural lands have gained more value than the inflation rate in almost every period. Therefore, you can be sure that an agricultural land you will buy or an orchard you will establish will gain more value than inflation. However, do not forget that you need to make your investments professionally for this.
Investing in farmland does not just protect against inflation. In addition, it allows benefiting from different advantages. Prominent among these advantages are:
• Rising Demand
As it is known, the world population is increasing day by day. On the other hand, agricultural lands are shrinking due to construction. Due to this situation, the demand for agricultural products is increasing. Increasing demand means that the commercial value of agricultural products changes positively.
• Low Volatility
With the right agricultural investment, the volatility in your income will be low. In the case of professional farming, there will be no serious changes in the figures you will obtain annually. Having low volatility allows you to plan your investments more effectively. Moreover, it significantly reduces the probability of encountering bad surprises.
• Stable Income
If the agricultural land is processed by professionals, you will receive a permanent income. Just as you earn rental income from real estate, you also earn income from agricultural land. Moreover, when you use the right methods, your income will be very high.
You can also invest in agricultural lands because of the advantages mentioned here and the protection against inflation. The investments you will make with the assurance of Invest Agrolidya will meet your expectations in general. You can contact us immediately for more detailed information.