Under current market conditions, many investors are seeking alternative asset classes to boost returns without dramatically altering their overall risk profile. Current markets are characterised by:
- Price volatility in mainstream asset classes.
- Unusually high levels of positive correlation between traditional asset classes and their sub components.
- Uncertainties over valuations due to low levels of visibility with respect to the global economy.
- Concerns over inflation in light of mass quantitative easing (increases to the money supply) in many economies.
- The disappearance of 'risk free returns' on cash due to historically low central bank interest rates. Similarly, many investors are reticent to buy longer term government paper because of inflationary fears.
As a result, many investors are now looking for alternatives investments with the following characteristics:
- 'Real' or 'hard' assets that are expected to provide principle protection.
- Simple, secure investment structures, preferably involving direct ownership of the underlying asset.
- Greater return than traditional fixed income strategies to replace lost "risk-free" income.
- Low or negative correlation to traditional assets classes such as stocks and bonds and to mainstream alternative investments such as commercial real estate and hedge funds.
- Superior performance in an inflationary environment (to mitigate inflationary risks from low interest rates, quantitative easing, commodity driven inflation etc).
- Good long term fundamentals to support capital growth in an investment environment where short term visibility is at historic lows.
Direct investment in land has the potential to provide all of the above features. This has resulted in rising interest from the investment community in recent years. Historically, the sector has been dominated almost entirely by corporate buyers with the relatively small number of investment buyers having had very little impact on demand. If the trend of rising demand from the professional investment community continues, it will provide meaningful additional support for land values in the coming years. To find out more please contact Market Worth Trading. The number for our UK office is +44 203 086 7959 and we will be happy to discuss your requirements directly. If you would prefer us to contact you, please complete the form to the right of the screen.
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