The Rise of Farmland as an Investment

Farmland is continuing to be a hot commodity in the U.S. and abroad. In fact, since World War II it has risen in value at a steady pace every year except in 1983, and 1985 to 1987. Investing in farmland is has the advantage that the average person can research and understand this asset class quite easily, particularly as compared to some other more complicated asset classes. Farmland has the added advantage of being tangible; you can touch it, live off of it, and there are a variety of ways farmland can generate income.

Agriculture produced from farmland provides food for the world population, which sits at nearly seven billion people. Expectations suggest that this number will reach nine billion and counting over the next 30 years. However, there is only a finite amount of quality farmland to produce food. With rising incomes in emerging markets, there will be a significant demand for a higher quality diet, which includes more meat. The future global demand for food is one of the driving forces behind the increasing value of farmland every year.

The real estate market for cropland brings with it leveraged buying; mortgages allow acquisitions for a relatively small amount of money. Farmland tends to appreciate in value even when the markets fluctuate, giving owners a more stable investment than some other asset classes.

 

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Four Things You Need to Know About Bitcoin

2017 was an excellent year for Bitcoin. The cryptocurrency reached new heights and became one of the hottest commodities of the year. However, the concept of Bitcoin is still complicated to most people, and even some of the most tech-savvy individuals have difficulty fully understanding it.

As it stands now, Bitcoin is only eight-and-a-half years old, yet it is the oldest and most valued cryptocurrency on the market. The interest to invest in Bitcoin is at an all-time high. However, before you go ahead and make that investment, there are some things to consider.

 

The Price

The price of Bitcoin, like most things in a market, relies on the laws of supply and demand. Currently, the supply is limited to 21 million Bitcoins. Increased demand will force the price to go up as well. The number of people in the world who actually use Bitcoin is relatively small, so the price tends to fluctuate on a daily basis. As more people begin to use Bitcoin, the price will continue to grow. In early 2011, the cost of one Bitcoin was worth less than $1. Predictions suggest that as Bitcoin’s popularity increases, it will be worth hundreds of thousands of dollars to accommodate this demand.

 

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Is Bitcoin A Fad?

Bitcoin was one of the biggest topics of 2017. The cryptocurrency rose to meteoric heights towards the last few months of the year. Some vendors are accepting it as payment (Overstock and Expedia) and it is becoming a technology that major financial institutions use. However, given it’s rising popularity, the question remains: is Bitcoin just a new trend? A former Nobel-prize winner thinks so.

American economist Robert Shiller compared Bitcoin to the bimetallism fad in the late 1800s, which saw both gold and silver accepted as legal tenders. On the markets side of things, he discussed seeing some worrying signs in his data relating to the 1987 stock crash. On CNBC’s “Closing Bell” he said, “confidence in the valuation of the market is indeed the lowest it’s been since 2000. And when it got low in 2000, the market fell about 40%. So it was bad.”

Shiller is not the only person who has doubts about Bitcoin. In a critique of the cryptocurrency, JPMorgan Chase & Co. CEO Jamie Dimon said, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air.”

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Developments in Ripple

While Bitcoin may be the most popular form of cryptocurrency on the market, there are other digital currencies making a name for themselves. Ethereum and Litecoin are two cryptocurrencies which have rivaled Bitcoin for quite some time. However, Ripple is another digital currency which is starting to be a big player in the market. It’s value spiked in the last few weeks and is continuing on an upward trend. It is still worth considerably less than Bitcoin, but it is gaining newfound attention.

Ripple (Ripple XRP) was launched in 2012 to enable global financial transactions. Ripple’s goal is to connect the thousands of different banking ledger systems into one consolidated system and reduce the need for banking institutions to park massive amounts of capital in order to facilitate transactions. What sets Ripple apart from the other digital currencies its current use with well-known banking institutions.

 

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Debunking The Common Myths of Blockchain Technology

Blockchain technology has gained a lot of momentum over the past few years, especially with the rise of Bitcoin. To review, blockchain, or the “distributed ledger” technology, offers a way to record transactions or any digital interaction securely and transparently by design. It is a database that maintains a continuously growing set of data records. One of its biggest advantages is that it is public, so the transactions stored in in the ledger are transparent.

Blockchain has been one of the most fascinating technological advancements in recent years. However, as with many other technological advancements in the past, there are many misconceptions surrounding blockchain technology. Take a look at some of the most common myths surrounding blockchain.

 

The Blockchain Can Be Used For Everything

The code behind the blockchain is compelling, but it is not magic. Some blockchain experts believe that the blockchain and smart contracts (contracts executed using blockchain) will replace money, lawyers, and other arbitration bodies one day. The only problem is that the code is insufficient given the number of cryptocurrency transactions in the chain. Additionally, outside of Bitcoin, cryptocurrency as a whole is a long way from becoming a mainstream payment method.

 

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Some Considerations in Private Equity Investing

Private equity is a form of alternative investment. It generally encompasses purchase of stock or debt in a private company. Investors in private equity seek to generate significant returns and certain investors can actively pursuing a role in monitoring and advising companies along with operational and corporate governance improvements.  These investors (typically institutional investors) hope that their involvement will serve to make the company successful so that their investment will be worth a premium price.

The private equity space (including venture capital) has grown exponentially over the past twenty years. Currently, its value is approximately $345 billion.  Here are some of the features of investing in private equity.

 

It Offers Lower Volatility

There is a level of risk that comes with all forms of investing. Even with private equity investing, there is an additional element of risk because these assets are usually illiquid. The benefit behind this is that they are not subject to the typical volatility that is experienced in the public equity markets. Private equity can be a lower volatility asset class and has the potential to generate positive returns.

 

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Can Bitcoin Become A Global Currency?

Global currencies are always evolving. For example, the dollar was once backed by the physical commodity of gold. This meant that you could take dollars to the government and exchange them for gold. Nixon changed this in 1971 when he announced that the dollar would no longer be backed by gold. Instead, the full faith and credit of the federal government would support the dollar. The rise in popularity of Bitcoin has created a form of currency that now rivals fiat money, especially as we move into the age of technology. It is not backed by gold or any government or bank and allows for complete anonymity.

Research shows that the number of active Bitcoin users can approach five million by the year 2019, with fifty-one percent of users being outside of the United States.

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