BlackRock Event Driven Equity Profits from Corporate Change

Coloring outside the lines isn’t just for kids in school—adding some color to the edges of your core portfolio can brighten returns. Investors adopted that strategy in 2021, pouring a record of nearly $4 billion in new money into so-called event-driven funds, or funds that invest in companies undergoing fundamental changes, such as a merger or acquisition. BlackRock Event Driven Equity (BALPX) received $2.3 billion of the inflow. 

Event-driven funds typically have little relation to stock and bond market ups and downs, so that even in down markets they tend to remain flat or lose less than standard stock or bond fund peers, says Morningstar analyst Bobby Blue. If you’re looking for diversification, a small allocation to an event-driven fund can hedge against volatility elsewhere.

The BlackRock fund is a standout. So far in 2022, the S&P 500 index is down 5.5%. Over the same period, the fund has gained a flat-ish 0.1%.  

Mark McKenna, the fund’s lead manager, works with a team of 12 other analysts. The team leverages BlackRock’s extensive network and resources to gain direct access to company executives in order to better understand the changes afoot at their firm. 

Those changes can include a range of company events. So-called “hard” events may refer to announced takeovers, for example, or company spin-offs. The fund holds shares in Danaher, for instance, which acquired General Electric’s biopharma business in March 2020. “Soft” events might include management changes or a stock being added or taken out of a particular index. Coty earned a spot in the fund in part because of new initiatives, including a product line revitalization. 

McKenna also devotes a small portion of the fund to distressed credit opportunities—specialty finance events, according to Blue, in which a company negotiates directly with BlackRock for financing, whether through a bond underwriting or holding IOUs directly for a short period. 

The fund’s hefty expense ratio of 1.57% is still less than the category average of 1.96%. Though the fund charges a load, it trades fee-free at several brokerage firms, including Fidelity and Schwab.

Source: kiplinger.com

CryptoKitties – What Are These NFTs and Should You Buy Into This Game?

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Cryptocurrency and blockchain technology have been increasing in popularity for some time, starting with Bitcoin and venturing into a wide range of digital collectibles worth ridiculous sums of money. 

In September 2017, the Ethereum network launched the ERC-20 token standard, a standard that would change the game. Its non-fungible tokens (NFTs), unique tokens you can’t interchange like Bitcoin and Ethereum, could be introducing scarcity to the equation. 

Shortly after the launch, what is now known as Dapper Labs introduced the blockchain game CryptoKitties. It quickly became a craze. But what exactly is CryptoKitties, do the NFTs have value, and how do you get involved?


What Are CryptoKitties?

CryptoKitties is a blockchain game featuring digital cats as NFTs, or crypto collectibles. In the decentralized application, or dApp, an application built on a decentralized platform that’s not governed by a single party, players buy, sell, trade, and breed a decentralized collectible the likes of Beanie Babies. 


You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.
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Each cat in the game is unique, as is naturally expected of NFTs today. The collectible’s uniqueness is stored in a “smart contract,” a self-executing agreement between the buyer and seller included directly in the lines of code, offering both scarcity and security. These contracts live on the Flow blockchain.

The game uses Ethereum (ETH) cryptocurrency. That adds an exciting twist to ownership of the collectibles. As the value of Ethereum rises, the value of tokens that use the Ethereum economy tend to rise as well, outlining one of the ways to make money with CryptoKitties. 

The concept works much like the value of fiat currency (such as the U.S. dollar) when used to purchase traditional investments. When the dollar is more valuable, investments you bought with dollars also increase in value. 


How Does CryptoKitties Work?

It all started with the platform’s genetic algorithm, a computer algorithm designed to ensure that each kitten in the game is born with a unique genome stored on its smart contract. The kittens all have their own “cattributes,” a wide range of features, including things like fur style, color, ear shape, apparel, and even background. 

These features combine to point to the rarity of the cat itself, with each virtual cat falling into one of the following scarcity categories:

  • Normal. This is the most common form of cat in the game. 
  • Fancy. Fancy cats are a rarer type of cat, characterized by special artwork and a fancy cats badge.
  • Special Edition. Special edition cats are in second place as the rarest cats in the game. They also feature special artwork and are released in limited quantities. 
  • Exclusive. Finally, exclusive cats are the highest-scarcity cats in the game. In many cases, exclusive cats will be the only cats of their kind. 

As with any other commodity, digital or otherwise, the value of these cats is based on the law of supply and demand. So the scarcity level of the cat and demand for CryptoKitties play a significant role in the price of the token. 

Once you own a cat, you can breed them to create new, unique NFTs. You do so with a male cat (Sire) and a female cat (Dame), creating a combination of the two. 


How to Play CryptoKitties

To play the game, you’ll need to start by purchasing your first virtual cat, a multistep process that works very much like using a gift card with your Apple or Google Play account.

1. Sign Up for a Cryptocurrency Wallet

To purchase your first cat in the game, you need to have some Ethereum. You can’t put Ethereum in a real-world wallet or on a debit card. Instead, you need a cryptocurrency wallet, which is a device, program, or service that securely stores information about your cryptocurrency transactions. 

There are various options out there, but the big difference between them is whether they’re custodial or noncustodial. Custodial wallets have passwords a company stores and manages, while the wallet-holder manages noncustodial wallets. 

Custodial wallets make it easy to access your crypto assets if you lose your password because there’s a third-party custodian in charge of the platforms these wallets live on. But custodial wallets are also centralized. There’s no central authority on noncustodial wallets. Users determine their wallet management style and are the only parties with their passwords. 

Decide which direction you’d like to go, and choose from one of the many options. For more information, read our article on the best cryptocurrency wallets. 

2. Fund Your Wallet

Next, you need to buy Ethereum and add it to your wallet. Some CryptoKitties are very inexpensive at 0.001 ETH, or about $2.60, while others are very expensive, costing about 1,000 ETH, or more than $2.7 million. 

Also, every time you make a transaction, you pay gas fees that can range from a few bucks to hundreds, depending on the demand on the blockchain at the time of purchase. In crypto, “gas” is the unit of measurement for the amount of computational power it takes to process the transaction and smart contract. You’re essentially paying the miner for the use of their processor.

Considering that, it’s best to start with around $250 worth of Ethereum to ensure you can cover the cost of lower-cost cats and the gas fees associated with owning them. 

3. Sign Up for CryptoKitties

You can find the CryptoKitties marketplace at CryptoKitties.co. Simply sign up for the site and connect your wallet. It’s also a good idea to check the secondhand market for better deals before pulling the trigger, especially for price-sensitive collectors. Some popular secondhand markets include OpenSea, Crypto.com, and Rarible, but OpenSea is best for CryptoKitties.

4. Buy Your First Cat

The game is all about owning, breeding, and earning from the sale or trade of digital cats. To do so, you need to own a cat. Take some time to search through the dedicated marketplace and OpenSea to find a cat you’re interested in owning. 

Once you’ve found it, simply click “Buy” to get started. If the cat you’re interested in isn’t listed for sale, you can bid on it to entice the owner to take your offer.  

5. Trade, Sell, & Breed

Once you own your first cat, you can trade, sell, and breed. Make wise decisions when doing so, and you stand to earn a hefty chunk of profits. 


How to Make Money on CryptoKitties

CryptoKitties are digital assets that can have substantial value. There are a few options for unlocking this value to pad your pockets. 

Sell & Trade Cats

One option for making money with the game is to use the assets within the game as a collection. If you can get your hands on the right cats, holding them for a short period and selling them has the potential to generate profits. 

For example, look for rare cats, like Exclusive and Special Edition or Founder Cats (one of the original 100 cats the game started with), or cats with “mewtations,” which is the first cat in the collection with a new cattribute like a specific fur color or background color. 

It’s also possible to trade cats with other members. In some cases, you can trade your cat for one that has a higher potential to grow in value. For example, someone might need your cat for breeding purposes. Making these trades and holding onto your investment and selling it in the future are other options for making money. 

Breed Cats

The breeding feature of the game is also a compelling way to make money. If you own a Dame, you can search the marketplace for Sire cats and either buy one or pay a small fee to another user to use their Sire as a breeder. 

Once they breed, the new kitty is yours to keep, trade, or sell for a profit. It costs a flat 0.04 ETH fee plus gas to breed your crypto kitties, even if you own both the Sire and the Dame. 

Keep in mind that both the Sire and Dame require a cooldown period after the breeding period, during which no more breeding can take place. That period is longer for Dames than it is for Sires. There are also limitations on how much time you have to breed special-edition traits, like purrstige traits, into your kitties. 

What kind of cat you get after breeding (and therefore how much it’s worth) depends on the cat type and traits of the Dame and Sire.

  • Normal Cats. You can breed normal cats to get either other normal cats or, with the right combination of genetic traits, Fancy Cats.
  • Fancy Cats. You only get the limited-edition Fancy Cats when two cats with very specific traits breed, and there’s a limit to how many times you can breed them, which varies based on the Fancy Cat type. 
  • Special Edition Cats. While you can breed Special Edition Cats to get regular cats, there’s no hope of breeding a Special Edition kitty. You can only buy them.
  • Exclusive Cats. You can breed Exclusive Cats to get regular or Fancy Cats but not Special Edition or Exclusive offspring.

You may also get lucky and end up with highly valuable cats, such as:

  • Misprint Kitties. Misprint kitties are CryptoKitties that were minted with mistakes in their designs. In some cases, the cat doesn’t look anything like its traits suggest. Once they catch the misprint, future traits will be printed properly, but you could make serious money if you end up with a misprint. 
  • Mewtations. Mewtations are CryptoKitties that are the first of their kind with a specific new trait. Only the first cat printed with a trait is given a mewtation gem, making them rarer and highly prized among collectors. 

Sire Cats

If you’re not interested in owning a new kitten and you own a male cat, you’re in luck. You can make money by allowing others to pay a transaction fee to breed their Dames with your Sire, generating passive income in the process. 


CryptoKitty FAQs

It’s natural to have questions, and with CryptoKitties being one of the most popular NFT-centric games on the blockchain. These are the answers to some of the most common questions. 

What Is the Most Expensive CryptoKitty?

The most expensive cat, sold in 2021, was Founder Cat #40. The cat sold for the Ethereum equivalent of a little over $1.06 million. The cat is orange in color and sits on a green background with similar-colored eyes. 

What Happened to CryptoKitties?

In the beginning, this game was one of the hottest on the blockchain, and believe it or not, it still has somewhat of a user base. In 2018, CryptoKitties spun off into Dapper Labs, and since then, several blockchain games have popped up, increasing competition. 

At the same time, a separation in the game between rich players and players with average income began to cut into trading profits, resulting in less demand. According to a 2021 research paper published in Frontiers in Physics, the rapid decline from stardom was largely the result of this divide and a reduction in trading profits for the average player. 

Are CryptoKitties Free?

No, the price for a cat in the game ranges from a few bucks to more than $1 million. 


Final Word

At the end of the day, the big question is whether or not you should buy CryptoKitties. If you’re looking at it from an investor’s point of view, the answer is probably not. 

Sure, there’s a chance the game will rise to stardom in the metaverse yet again. But there’s a larger chance interest in the game will continue fading as increasing competition with more intriguing functionality hits the blockchain.

While the heyday of the CryptoKitty may be in the past, it was fun to watch the rise and eventual fall of the game, and it’s impossible to discount the integral role it played in the development of the metaverse of today. 

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

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Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

Apple Credit Card Adds Ace Hardware To 3% Category

Update 4/28/22: Ace Hardware now added to earn 3%. Full list of 3% merchants:

  • Ace Hardware
  • Panera Bread
  • Exxon/Mobil
  • Walgreen’s
  • Duane Reade
  • Uber
  • UberEATS
  • T-Mobile store purchases
  • Nike
  • Apple

Update 8/3/20: Apple has now added Panera Bread to earn 3%.

Update 6/29/20: Apple has now added Exxon and Mobil.

Update 11/25/19: Apple Card has now added Nike to the 3% category when using Apple Pay. Significant addition.

Update 9/19/19: They’ve now added T-Mobile as well to the 3% category when using Apple Pay at a T-Mobile store. Note: paying your monthly bill with T-Mobile will apparently not get 3%. It’s probably possible to pay your bill in-store and get the extra rewards, but barring that, any bill payments will earn normal 1% or 2% rewards (depending whether you use Apple Pay or the physical card number).

Update 9/12/19: Apple Card has added Walgreen’s and Duane Reade to their 3% category when using Apple Card with Apple Pay (starts Friday 9/13/19). That’s on top of Uber & UberEATS which were previously announced.

Original Post:

The long awaited/hyped public release of the new Apple credit card finally came today, with card now available to anyone with an updated iPhone (requires iPhone 6 or later). In the press release today, Apple announced an additional 3% category of Uber and UberEATS:

Apple Card is extending 3 percent Daily Cash to more merchants and apps. Starting today, customers will receive 3 percent Daily Cash when they use Apple Card with Apple Pay for Uber and Uber Eats.4 (4 Apple Pay is coming soon to Uber services like Uber Cash, Scheduled Rides and JUMP. ) Customers can request a ride through Uber in more than 700 cities across the globe and order a meal through Uber Eats in more than 500 cities around the world. Apple Card will continue to add more popular merchants and apps in the coming months.

Previously, only Apple purchases were mentioned as earning 3%, while regular Apple Pay purchases earn only 2%. Now, you can get 3% on Uber when using Apple Pay. This is also great advertising for Uber in their competition with Lyft as there are lots of avid Apple fans.

It’s interesting what they say in the end there that “Apple Card will continue to add more popular merchants and apps in the coming months”. We’ll see.

We’ll add this benefit to our full review: Apple Credit Card Full Details – 3% at Apple, 2% with Apple Pay, 1% with Physical Card; No Fees. 

Hat tip to @iam_K_Man

Source: doctorofcredit.com

4 Steps to Build a Resilient Financial Life

Life can throw you curveballs, bringing unexpected events and expenses. That’s why building financial resilience in your life can be so powerful — and it starts with learning to have a basic sense of how your finances work and what you can do to make them work better for you.

If you’re feeling a bit uncertain or overwhelmed about how to get your finances in order, the first place to start is to define your goals. What is it that you want to achieve? It may be sticking to a budget, paying down debt, saving for retirement, building an emergency fund or saving for a big expense like a car, a home or a child’s education.

 Let’s walk through four basics for building a more resilient financial life.

Step 1: Be SMART with your goals

Whatever your goals, I encourage you to put pen to paper to write them down. I like to use something called the SMART goal-setting method, which stands for:

  • Specific
  • Measurable
  • Action-oriented
  • Realistic
  • Time-bound

For example, if you want to pay off debt, start with the actual dollar amount of how much you want to pay down. That makes it Specific and Measurable. Then, get Action-oriented by defining the steps you’re going to take. If it’s paying down debt, maybe you can cut back on eating out or put your tax refund toward your credit card bill.

By making your goal Specific, Measurable and Action-oriented, you’ll be able to see if your goal is Realistic — and if not, you can adjust, like by extending the time frame. Speaking of time, the T in SMART stands for Time-bound: Give your goal an expiration date so you have a target in mind. Once you reach that deadline, you’re encouraged to make the next goal, and then the next — and that’s how we make progress in our financial lives.

Step 2: Be organized

I like to use the analogy of building a house. It’s fun to dream about your floor plan and decorations, but building the house doesn’t truly begin until you break ground and lay the foundation. Creating a more formal budget is the foundation of our financial lives, helping us see exactly where money is flowing so we can better allocate it to our many needs, wants and goals. Calculate every dollar coming in, including earnings from your job or any other sources, such as a rental property or side hustle. Next, track your expenses — everything from rent and gas to coffee and birthday gifts. Once you list all those expenses, separate them into two columns for needs and wants.

This part is going to be different for everybody. For example, we all need to wear clothes, but do you really need new clothes every month? Maybe you do if have a growing child or need a new coat — but maybe not, and maybe you can put new clothes in the “want” column instead of the “need” column.

Another helpful tip is what’s called the 50-30-20 rule: Think about 50% of your budget going to cover needs like bills, food, housing, insurance and utilities; then the next 30% to wants like streaming services, vacations or new gadgets; and then the remaining 20% to savings — like your retirement account, stock portfolio and emergency fund.

Step 3: Be realistic

Practice makes perfect, so think of your financial life like playing a game of darts, where each triangle on that dart board is a different aspect of what you said you were going to spend or save to reach your goals. The more you practice throwing that dart, the better you’re going to be at hitting the mark consistently.

Of course, many of us live paycheck to paycheck or rack up debt to make ends meet. If that’s where you are today, it still helps to get a clearer picture of your goals, income, spending, needs and wants. Write it all down and try to identify places where you can potentially cut back. For example, you probably need your cellphone, but is there a less expensive plan that could work? If there’s really no wiggle room, look for ways to bring in additional income — maybe turning that passion project into a side hustle or picking up a flexible part-time job.

Making ends meet can be tough, so it’s important to put energy into building a financial cushion when you have the chance. You may have also heard that it’s a good idea to have three to six months of essential expenses saved up as an emergency fund, but for many of us, that’s easier said than done. Just keep in mind that savings don’t appear overnight. Start small, figure out what works for your lifestyle, and save — even if it’s $5 at a time.

Step 4: Get support

Financial literacy is simple, but not necessarily easy. The sooner you start budgeting, saving and investing, the more time you have for your money to potentially grow and help you reach your goals. Even small amounts of invested money can add up over time, thanks to the power of compounding interest. So make sure that you’re working to build up your financial resilience today so that when you retire, you can live the kind of life that you’ve always envisioned. If you feel behind, don’t panic — just start today, and start as small as you need to.

Our finances are such a significant area of our lives, which is why I personally find it very reassuring to know that there are many types of professionals out there who can offer support as you assess your options, prepare your next steps, and work to achieve your goals. Maybe you’re ready to build out a financial support team with help from attorneys, accountants or financial advisers and coaches. Many companies offer their employees access to financial education, advice and resources as a part of their benefits package, so check out whether your company offers any additional support that can help you take control of your financial journey today.

This article has been prepared for informational purposes only. The information and data in the article have been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be appropriate for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Head of Financial Wellness, Morgan Stanley

Krystal Barker Buissereth, CFA®, is a Managing Director and the Head of Financial Wellness for Morgan Stanley at Work. In this role, she is responsible for working with corporate clients and organizations on creating, implementing and managing financial wellness programs that meet the needs of their employees.

Source: kiplinger.com

5 Popular Investing Trends of 2022

Heading into 2022, many investors had a brighter outlook on the U.S. economy and financial markets. Both staged impressive rebounds in 2021 after Covid-19 quarantine measures triggered wild volatility. Vaccine breakthroughs and stimulus checks further stoked optimism that the finances of many businesses and individuals were on the mend.

However, rising inflation, higher interest rates, and geopolitical conflict have been several headwinds getting in the way of continued economic and financial market growth in 2022. Year-to-date, the benchmark S&P 500 Index is down about 7% through April 20, 2022, after rising nearly 27% in 2021.

Nonetheless, there are opportunities in some areas of the financial markets for investors looking beyond Covid-19. Here’s a look at five popular investment trends for 2022.

1. Looking Beyond Covid-19

Some of the success stories in the stock market in 2020 and 2021 were companies that benefited from coronavirus-related stay-at-home measures, like entertainment streaming businesses, video conferencing services, and at-home workout companies. But many companies in these sectors are losing their luster as the country reopens; investors are looking for other opportunities as the world returns to normal.

Investors have wagered that airline, cruise line, travel website operators, and other transportation stocks will benefit now that most Covid-19 restrictions are in the rearview mirror. While these sectors, like the rest of the economy, may be hindered by rising interest rates and inflation, many investors still see them poised to grow because of pent-up demand.

2. ESG Investing Movement

Financial advisors often tell clients to take their emotions out of investing. However, a new breed of ethically-minded investors has become increasingly interested in putting their money where their values are in recent years.

This strategy is known as environmental, social, and governance (ESG) investing. A Bloomberg study estimated that ESG investments may hit $41 trillion globally by the end of this year and $50 trillion by 2025, a third of global assets under management.

In early 2022, the Russian invasion of Ukraine set off global protests and pronouncements against the unprovoked conflict. Many American companies followed by pulling their business operations out of Russia and issuing statements on their commitment to Ukrainian democracy. This development is just one example of companies looking beyond the bottom line in their business decisions. Moreover, shareholder advocacy groups are applying pressure on some companies to back their pledges with transparency on diversity, equity, and inclusion issues.

3. Web 3.0

Bitcoin and other cryptocurrencies were among the most discussed investments in 2021, with wild swings in prices as investors put money into these digital assets. The prices of crypto assets cooled off in the early portion of 2022, but they are still in the front of the minds of a lot of investors.

Because of the success and attention paid to crypto over the past several years, investors are looking to put money into related investments: companies involved in what is known as Web 3.0, or the next phase of the internet. Web 3.0 companies include those involved with blockchain technology, decentralized finance (DeFi), the metaverse, and artificial intelligence.

4. Commodities Markets

After years of muted returns, commodity prices rebounded in 2021. Investors wagered that recovering economies would lead to more construction, energy usage, and food consumption. Tight supplies also boosted these markets.

Moving into 2022, the attention paid to the commodities market has only intensified, especially with the geopolitical turmoil in Ukraine and Russia affecting critical commodities like oil, natural gas, and wheat. Prices of these key commodities have spiked as the Russian-Ukrainian conflict constrains supplies.

Rising prices of agriculture, lumber, and industrial and precious metals have sparked a debate about whether commodities are going through a new supercycle. A supercycle is a sustained period, usually about a decade, where commodities trade above long-term price trends.

Recommended: Commodities Trading Guide for Beginners

Give your money a chance to grow.

Trade stocks, ETFs, and crypto – or start an IRA.

5. Hot Housing Market

The housing market will continue to be an area of focus for investors, policymakers, and potential homebuyers in 2022. During 2020 and 2021, rock-bottom mortgage rates, a shortage of housing supply, and homebuyers looking to purchase larger houses to accommodate working from home led to houses selling quickly and at high prices. Additionally, investors and real estate investment trusts (REITs) bought an increasing share of homes on the market.

During the first quarter of 2022, mortgage rates are rising at a record pace, with the average 30-year mortgage nearing 5% for the first time since 2018. Analysts are looking to see if rising mortgage rates will cool the hot housing market or if buyers will continue to purchase homes.

Recommended: Pros & Cons of Investing in REITs

The Takeaway

Putting hard-earned dollars into any investment — whether it’s trendy or traditional — can be daunting. Investors should be aware that, while momentum can feed investment fads for long periods, some market trends can become vulnerable because of frothy valuations and turn on a dime.

However, if investors still want to try their hand at choosing popular investment trends themselves, SoFi’s Active Investing platform makes it easy by making it easy to track their picks of stocks, ETFs and fractional shares. Investors can also make trades without incurring management fees from SoFi Invest®.

Open an Active Investing account with SoFi today.


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Is Buying Farmland a Good Investment? 4 Reasons to Own Agricultural

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Real estate is one of the most popular alternative investments. When most people think about real estate, they imagine rental homes, office buildings, and storage units.

But what about farmland?

Some of the world’s wealthiest people use farmland to diversify their portfolios, and for good reason. Fertile crop lands are known for producing returns that outpace most assets while offering reduced volatility. 

Of course, as with any other investment there are risks to consider. Bad weather can cause significant reductions in returns, the cost of operating a farm can become intense quickly, and if you run a farm yourself, the work is arduous, to say the least. 


You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.
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So, is farmland a good investment when you consider all factors?


Is Buying Farmland a Good Investment?

There’s no question that farmland is an attractive investment option for the right buyer. The key is research and ensuring that you get a quality deal. There are several reasons farmland makes a good investment:

1. Farmland Returns

Regardless of what you’re investing in, a strong investment is one that creates strong returns. Let’s face it, you’re not investing for the sheer purpose of owning assets; you’re investing as a means to achieve financial stability, increase your net worth, or set up a comfortable retirement. Life isn’t all about the money, it’s your investments are all about the benjamins. 

So, how does farmland stack up?

You might be surprised that farmland has been one of the best returning asset classes for the past 20 years, producing a 12.24% average annual return according to AcreTrader. That’s impressive by any benchmark. Just look at some of the average annual returns of more traditional investments:

  • Stocks. The S&P 500, the flagship stock market benchmark for the United States, has generated annualized returns of about 10.5% over the past several decades. 
  • Gold. According to Statista, gold — one of the world’s most prized safe-haven investments — generates average annual returns of around 10.61%. 
  • Silver. According to data from Macrotrends, silver saw annualized returns of around 10.33% from 2009 through 2020, although there was quite a bit of turbulence throughout this period. 

Of course, fixed-income investments like bonds are known for producing even lower returns. 

So, when looking at the long-term return rates of various investment vehicles, it quickly becomes clear that the more than 12% average annual return enjoyed by farmland investors in recent decades is impressive. 

2. Land Values Are Expected to Continue Rising

What makes land as an asset class so special?

Scarcity. 

Although it may seem as though land is abundant today, that’s far from the case, and the global supply of real estate for sale continues to shrink. An increasing global population means more demand for crops and a growing demand for land, both for farming and living on.

Stating the obvious, there’s no way to create more Earth; our planet is only so big. By the law of supply and demand, the finite supply of land itself and the fact that demand is increasing by the day suggest price appreciation will occur over time, meaning that farmland values must rise.

Land is in finite supply. Sure, the Earth is a decent-sized planet, but it’s not growing! 

As the global population continues to grow, new homes will need to be built and farms will need to supply more food for people to eat. As this trend continues, land values are only likely to continue on the upswing, leading to significant growth in prices.

3. Farmland Provides Passive Income

Price appreciation isn’t the only way to make money with farmland investments. 

Farms are active operations that make money each and every year. As long as you own farmland, you have the opportunity to earn reasonable returns by growing crops on the land. 

Of course, running a farm can be expensive and time consuming, but as we’ll discuss shortly, there are many ways to go about investing in farmland. Unless you’re buying the physical land and working it yourself, the farming operations are handled by a third party. 

By doing your due diligence and investing in farmland that’s best for high-value crops, you’ll have the ability to generate meaningful passive income through your investments. However, there are a few factors that influence a farm’s passive income:

  • Different Crops Have Different Values. Paying close attention to the crop produced on the farm you’re investing in is crucial. For example, 1,000 pounds of pistachios is far more valuable than 1,000 pounds of corn. 
  • Different Crops Take Longer to Mature. Although pound for pound pistachios are more valuable than corn, corn matures far faster than pistachios. If you’re looking to generate immediate income, it’s best to invest in farmland known for producing crops that mature quickly. 
  • Environmental Factors. Finally, environmental factors will play a role in the cost of operating a farm, whether you own the entire farm or shares of it. For example, a farm in a region known for high levels of rain will be less expensive to water than one in a dryer climate. Weather factors like severe temperatures or varying rainfall amounts can greatly impact a farm’s yield in a given season. 

4. Food Demand Points to a Strong Long-Term Investment

Once you get into farmland ownership, whether directly or indirectly, you may decide you’ll never sell your holdings, and for good reason. Food demand is growing sharply for two reasons.

First and foremost, the global population is growing quickly and that growth has been accelerating. This trend is expected to continue for the foreseeable future. After all, more babies today means more weddings in 20 years and more families having more babies. According to SeafoodSource, about 2.3 billion people will be added to the global population by 2050, requiring 70% more food then than the global population requires now. 

That growth in demand for the crops produced on farmland means the revenue generated per acre is likely to climb dramatically over the coming decades. As a result, there’s a strong argument that farmland isn’t just a strong investment in terms of price appreciation, but that it’s worth holding onto for the long run in order to reap the benefits associated with feeding the world. 


Pros and Cons of Farmland as an Investment

Every asset class has its strengths and weaknesses, and farmland is no different. Here are the major advantages and disadvantages of investing in farmland.

Pros of Investing in Farmland

There are several reasons to consider investing in farmland. It has the potential to generate strong, relatively stable returns while making you feel good about what your investment dollars are supporting. Here are some of the biggest benefits to farmland investments. 

High Returns

You often hear stories or read ads about returns of 100% or more on an annualized basis. The truth is, those types of returns are ridiculously difficult to achieve, if not impossible in most cases. The general rule of thumb is that if you’re producing 10% or more per year in your portfolio, you’re doing very well. 

Farmland is more than capable of doing just that. 

As mentioned above, the average return on a piece of farmland over the last couple of decades has been about 12.24%, outpacing stocks, bonds, gold, and silver. If money talks, farmland is definitely doing the talking. 

Low Volatility

Most investments that tend to outperform some of the most watched benchmarks come with incredibly high levels of volatility, meaning that the assets are known for wide swings in value. While land does increase and decrease in value, it generally does so at a relatively steady pace. 

This lack of volatility is a big draw for many investors, especially the risk-averse crowd. 

The Feel-Good Effect

There are tons of different things you can do with your investment dollars — some a bit more noble than others. Investing in farmland is a venture that’s both profitable and valuable to society. You’ll know that your investments aren’t just making money for you, they’re playing a role in making it possible to meet the growing demand for food, a basic humanitarian need. 

Passive Income 

Those looking for income from their investments can benefit greatly from investing in real estate. Rental properties provide investors with rental payments, but farmland makes passive income from the crops it produces.

After all, when you own a farm, you’re not just holding an asset that was designed to sit idle and await price appreciation. You’re investing in an asset that’s made for making regular annual income sometimes literally grow on trees. 


Cons of Investing in Farmland

Sure, there are plenty of reasons to consider investing in a farm, but there are also risks to consider. Some of the most significant risks include:

Market Risk 

The amount of money you make from crops on your farm will depend heavily on commodity prices. Should commodities fall in value, there’s a good chance your farmland investments will underperform. 

Liquidity Risk

It’s far easier to sell a share of Apple stock than it is to offload a piece of land. When investing in farmland, you may be stuck with your investment for years before a buyer comes along. 

Poor Weather Conditions

From time to time, severe weather or an unexpectedly harsh winter or summer will lead to lower-than-expected yields, directly affecting the return on investment you’ll experience. 

High Cost of Exposure

Buying farmland isn’t cheap, and with limited inventories available, it’s only getting more expensive. As a result, farmland investments are usually only available to those with a relatively high value investment portfolio. 


How to Invest in Farmland

As mentioned above, there are quite a few ways to go about investing in farmland. Some of the most common include:

Buy Farmland Directly

The most obvious way to go about making a farmland investment is buying the land outright. To do so, you’ll find yourself searching websites like Zillow and Realtor.com for agricultural land for sale. Unfortunately, you’ll also find that your options are limited. 

According to the U.S. Sustainability Alliance, 98% of farms in the United States are owned by families, representing about 86% of U.S. farmland production. Much of the remainder of the farmland is held by institutional investors and high net worth individuals. Even Bill Gates owns 242,000 acres of cropland in 19 different states. 

As a result, the supply of agricultural properties available for purchase is quickly diminishing, with the vast majority already owned by a holder that’s not interested in selling. However, with a bit of research, you may be able to find a worthwhile property. 

Invest In Farming ETFs

One of the simplest and most common ways to access farmland investment is to invest in exchange-traded funds (ETFs) dedicated to farming. ETFs are a popular type of investment vehicle that pool money from a large group of investors to buy assets according to the fund’s prospectus. 

Farming ETFs invest in stocks that represent farming companies or in commodity futures. For example, one of the most popular is the Invesco DB Agriculture Fund (DBA), which invests in a wide range of agricultural futures from cotton to soybeans. 

Invest In Farming REITs

Another way to go about making investments in farms is to invest in farming-focused real estate investment trusts (REITs). REITs are funds that pool investment dollars from a large group of investors, much like ETFs. However, farmland-focused REITs use those investment dollars to purchase and maintain farmlands on behalf of shareholders. 

By investing in these companies, your investments are supporting large corporations that have farming down to a science. For example, one of the largest farming REITs is known as Gladstone Land (LAND). The fund owns land in 14 states and actively produces returns for its investors through farming operations. 

Be Part of the Crowd

Crowdfunding has become a popular way for companies to raise the money they need, and many of those companies are farmers. In fact, there are several websites and apps dedicated to connecting retail investors to farmers in need of funding. The rise of real estate crowdfunding has made it easy for everyday investors to participate in farmland investments.

When taking advantage of these investment opportunities, investors are generally granted a percentage of ownership in the farms they support. So, when the farmer earns money from the crops produced, the investors will each receive their share of the profit.  


Where to Invest in Farmland

One of the biggest obstacles to farmland investing is figuring out where exactly to go to make the investments. These days, there are several options to consider. 

Real Estate Listings

If you’re interested in buying physical land and managing the farm on your own, you’ll want to go to real estate listing websites like Zillow, Realestate.com, and LandWatch.com. These websites have a central focus on selling real estate, and most have sorting options that allow you to browse land-only listings rather than residential properties.

Before purchasing a physical piece of land for farming, make sure that land is zoned for agricultural use. 

Crowdfunding Platforms

There are a few major challenges associated with buying land directly. Not only is the initial investment required going to be pretty hefty, farming isn’t easy work. That’s why many investors prefer buying land through crowdfunding platforms. 

By purchasing land this way, the farming operations aren’t your responsibility. Instead, they’re the responsibility of the farmer who’s selling shares of the land. Moreover, crowdfunding platforms allow you to invest in farmland with less out-of-pocket cost. Although most platforms have minimum investments ranging from $10,000 to $15,000, that’s far less than you’d pay to own a farm and the equipment required to operate it. 

Crowdfunding platforms geared toward farming are essentially in the business of connecting farmland partners that are interested in forming long-term, profitable partnerships. Some of the most popular platforms include AcreTrader, FarmTogether, and FarmFundr. 

Unfortunately, however, the vast majority of crowdfunding platforms for farmland are reserved for accredited investors with high incomes or high net worths. It can be harder to find opportunities that allow investors with more modest means to buy into shares of farmland.

Buy Farming Stocks, ETFs & REITs

For most investors, the best way to go about investing in farmland is to buy farming stocks, ETFs, or REITs. These investments are accessible to everyone, and the minimum investment required equates to the cost of a single share of the company, fund, or trust, which is generally under $100. 

You can purchase these assets with any popular broker like Charles Schwab, E*Trade, and TD Ameritrade, among a long list of others. 


Final Word

All told, farmland is a great asset to add to your investment portfolio. While there are hurdles to purchasing physical farmland, whether directly or through a crowdfunding platform, it’s easy to gain access to these assets in the stock market by purchasing stocks, ETFs, or REITs focused on farming. 

As is the case with any investment, it’s always important to do your due diligence. That’s true regardless of the type of farmland you’re planning on buying or whether you plan on investing in it directly or indirectly. Research is the foundation of any strong investment decision. 

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

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Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

Chase & Citi ‘Stored Cards’ Feature Shows Which Websites Saved Your Cards

Chase has a cool feature which I never noticed before called ‘Stored Cards’. It shows where each of your Chase cards is stored for recurring payments. For example, it might show Paypal, Amazon, your cable company, Uber, or any other business where your card is saved within their system.

To find this, go to the Security & Privacy tab on the website you’ll see the Stored Cards tab. In the app go to Profile (top-right corner icon) > Settings > Security Center > Stored Cards.

You’ll also see which digital wallets your cards are connected to. And in the Security Center there’s information on which third parties are tracking your account, such as Mint.

This feature is apparently a year or two old, but I just noticed it now when reader Danielle tipped me off.

Update: Readers note that Citi has a similar feature which can be found in the mobile app > Services > Card control hub.

Source: doctorofcredit.com