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Economics Research International
Volume 2011 (2011), Article ID 924708, 8 pages
http://dx.doi.org/10.1155/2011/924708
Research Article

Is Farmland As Good As Gold?

Department of Management and Marketing and Potash Corp Centre, Edwards School of Business, University of Saskatchewan, 25 Campus Drive, Saskatoon, SK, Canada S7N 5A7

Received 3 August 2011; Accepted 16 September 2011

Academic Editor: Jos van Ommeren

Copyright © 2011 Marvin J. Painter. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

An analysis of Canadian farmland risk and its return on investment shows that a Farmland Real Estate Investment Trust (F-REIT) and gold would have significantly enhanced portfolio performance over the past 35 years. Investors who desire low-risk portfolios would not have benefited from an F-REIT or gold investment. However, investors in the medium-risk category could have improved the financial performance of their portfolios by including an F-REIT investment rather than gold. The financial gains from F-REIT result from a level of risk that is lower than gold, REITs, and stocks, an expected yield that is greater than for bonds, and a low correlation with other financial asset returns.