Planting Seeds for Future Wealth

While most of your wealth will likely be invested in stocks, it’s important to have investments that are not affected by the volatility of the stock market.

It’s the hills. It has to be the hills.

I grew up in Kentucky, where at every turn you are either standing at the top of a hill or down in a valley. In certain spots, there are great vistas spread before you, dotted with little communities and great rolling farms. Of course, in Kentucky, those fields are likely to hold corn, tobacco or horses.

While most of your wealth will likely be invested in stocks, it’s important to have investments that are not affected by the volatility of the stock market.Standing in Uruguay, I find myself on a hill, looking out across this vast vista to find the land covered in grapevines, soybeans, timber, cows and sheep. The only sounds you hear are the rush of the wind and the occasional birdsong. This country somehow manages to feel both completely untouched by the chaos of the rest of the world and as if I’m standing in my own hometown.

And even if this quiet, bucolic life isn’t for you, those rolling, perpetually green hills hold something that you can’t overlook: great opportunity to grow your wealth.

Beyond the Stock Market

Ted Bauman kicked off the second day of presentations at the Offshore Investment Summit by talking about interesting ways to hedge your bets. As he’s explained within The Bauman Letter, it’s important to have your wealth properly diversified to protect it against potential threats that could arise, whether that’s volatility within the market or shifts within government policy.

While most of your wealth will likely be invested in stocks, it’s important to have investments in assets that are not affected by the ups and downs of the stock market, such as property and collectibles. By including land and collectibles in your portfolio, you are achieving steady growth while being largely immune to sharp sell-offs in stocks.

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Collectibles: Unique Investment Opportunities

Next up was presenter Geoff Anandappa of Stanley Gibbons Ltd. Delving into the theme of diversifying your portfolio, Geoff discussed the importance of diversification via rare tangible assets, such as collectibles, as a way to add stability through uncorrelated assets. With collectibles, the market is dominated by collectors, so during tough economic times, these assets aren’t being sold in a mad rush like stocks.

While most of your wealth will likely be invested in stocks, it’s important to have investments that are not affected by the volatility of the stock market.In fact, many investors and collectors rush to pick up new collectibles due to its ability to retain their value. Collectibles offer stable returns of approximately 10% per year, and Geoff noted that even during the market downturn in 2008, collectibles such as coins and stamps rose in value.

What’s more, Stanley Gibbons recently added collectible movie posters to their offerings. These items offer not only nostalgic value, but many are incredibly rare and have seen stunning growth in value. Plus, this is an interesting collectible that you can hang in your home.

Through the Flexible Trading Portfolio, Geoff showed how you can easily add collectibles to your portfolio. What’s more, there are no annual charges or maintenance fees. If you would like to learn more about ways you can diversify your wealth through collectibles, you can contact Geoff on his U.S. cellphone at 1-707-466-4999 or by email at ganandappa@stanleygibbons.com.

A New Look at One of the Oldest Professions

When asked whether he’d rather have all the gold in the world or all the farmland in the world, legendary investor Warren Buffett quickly chose farmland. At the end of the day, everyone has to eat and the world’s population is growing, creating a steady demand for quality food.

While most of your wealth will likely be invested in stocks, it’s important to have investments that are not affected by the volatility of the stock market.The third presentation of the day was by Sebastian Da Silva and Juan Federico Fischer, who revealed that land prices in Uruguay have temporarily pulled back, creating a great buying opportunity for investors. Sebastian and Juan showed that Uruguay experienced a similar pullback in 2002, just before 13 years of steady appreciation.

Uruguay offers great opportunities and is a competitive global player in farming with its nondegraded soil, even year-round rainfall and two-crops-per-year growing season. What’s more, Uruguay offers a transparent market.

But I don’t know anything about farming. Sure, growing up in Kentucky I spent some summer afternoons working out in the garden with my grandfather, but that certainly didn’t give me the experience I need to succeed at farming. And I’m sure I’m not alone.

However, if you purchase farmland in Uruguay, you have two great options. You can lease out the land and receive a steady annual income of approximately 3% to 4%. Or you can hire a farm management firm, which will earn you a steady annual income of roughly 6% to 7%. (Forestry earns about 10% to 11% annually.)

Juan and Sebastian concluded their talk by taking us on a tour of a vineyard and a soybean farm.

If you would like more information about a potential investment in farmland, whether it’s timber, soybeans, cattle or even a vineyard, you can reach Sebastian Da Silva at www.dasilva.com.uy or email him at sdasilva@dasilva.com.uy.

Regards,

Jocelynn Smith
Sr. Managing Editor, Sovereign Investor Daily

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