Gold Magazine April - May 2013, Issue 25 | Page 68

alternative investment

{money}

Growing Money
on Farmland
Africa and Australia provide good opportunities By Steven A. Newbery

W

hilst most
major equity markets
showed
some signs
of recovery
over the
course of 2012 – both the S&P 500 and
FTSE 100 posted decent gains – serious
concerns remain about global recovery in
mainstream stocks and bonds. In fact, it
is a very mixed picture for equities; the
Shanghai Composite, for example was
down year-on-year (to mid-December
2012) and the rally for US stocks still
leaves the S&P below the 2008 peak
level.
The rally in European share prices still
leaves the major index for that region
down on its values five years ago, while the

Farmland is the only
property sub-sector
that continues to show
inflation-beating gains
on capital and income
FTSE 100 is below its 2008 peak
and Japan’s Nikkei 225 index is
also down on its 2008 levels. This
means that investors – rather than
traders – continue to lose money on equities, on a capital appreciation basis, and
dividend levels of late are unlikely to have
offset those losses.
In the US, whilst 2012 was a good year
for dividends generally, there were still
many leading companies which cut their

68 Gold the international investment, finance & professional services magazine of cyprus

dividends or simply maintained them. The
outlook for bonds remains arguably bleak,
with investors fighting a battle to beat
inflation – a battle which they are unlikely
to win. 
Traditional property markets in developed countries also remain difficult. In the
UK, for example, while both residential
and commercial property values have continued to rise in London, other parts of
the country are still seeing values decline.
And within commercial property, even
in London real challenges remain for the
retail segment. US house prices have begun
to recover, but from an extremely low base.
However, the market there has taken heart
from news that construction activity has
picked up. As with so much else in the US
economy, however, how far this rally will
go would appear to depend on a resolu-