4 Best Assets to Hold in a Bear Market
Here are the best alternative assets to diversify your portfolio, hedge against inflation and generate income.
ByMoneyMade
Updated Oct 7, 2022
Updated Oct 7, 2022
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Alternative Assets
Balanced Investing
Extra Income
- Invest alongside Buffet and Gates in this $2.7 trillion market
- Investors netted over 9% annualized returns with private market loans using this platform
- Get unprecedented access to an asset class that withstood what the stock market couldn't
They say "don't put all your eggs in one basket," and that goes for investing, too. Watching your money shrink as the market plummets feels like a punch to the gut. But alternative assets can help protect your portfolio by:
- Providing returns with low (or no) correlation to the stock market
- Hedging against inflation
- Offering low volatility
- Generating income
Hedging against the stock market with alternative investments gives peace of mind and fuller baskets. In the past, most of these investments were only available to the ultra-wealthy, but now even everyday investors have access to alts.
Here are four alternative asset classes that have proven to be effective hedges against inflation and recessions.
1. Hedge against inflation with the $2.7 trillion farmland market
1. Hedge against inflation with the $2.7 trillion farmland market
In 1945, at just 15 years old, Warren Buffet bought a 40-acre farm with $1,200 in savings. Almost 80 years later, 40 acres of farmland in Nebraska is worth $134,400—a 572% increase in value (with inflation). It's no wonder that Bill and Melinda Gates have become the top farmland owners in the country, acquiring nearly 270,000 acres since 2017.
As one of the world's oldest investable assets, farmland is also one of the most recession-proof. Regardless of the economy, we all must keep eating. This has made farmland an outstanding hedge against inflation and a stabilizer of wealth when other markets turn south. In fact, since 1991, U.S. farmland has provided average returns of 12.24%, four times the average inflation rate of 3.21% during the same period.
Farmland also has low correlation to the stock market, making it a great portfolio diversifier. If you count income and appreciation, farmland has returned an impressive 11% annualized from 1992 to 2021. Meanwhile, the benchmark S&P 500 has returned an inflation-adjusted 8%.
Chart comparing the value of $1000 investments in farmland, real estate, stocks, bonds, and gold from 1992 through 2021.
Source: farmtogether.com
FarmTogether is an investment manager that gives accredited investors access to vetted U.S. farmland. Since 2017, FarmTogether's offerings have generated up to 19% net cash yield, with target net IRRs of up to 15%.
Join FarmTogether today to invest in some of their 911 million acres of U.S. farmland, green thumb not required.