There are a number of reasons why investing in corn could be a good fit for your portfolio. Let’s look at just a few of those current benefits.
Global Growth in Corn
World, economies are still growing rapidly. The best example of this, of course, is China’s economy. With more than a billion hungry people, corn is a raw material for which demand will only increase. Moreover, prosperity is increasing worldwide, which will lead to an increase in the consumption of meat. In practice, corn is also often used as food for livestock. So it’s a Win-Win for corn.
Corn as a Protection Against Inflation
In bad economic times, you often see Central Banks printing money. This causes inflation. This makes the money liquidity worth less. By investing in a commodity like corn, you can protect yourself against inflation. The good news is that typically, the price of corn rises along with global inflation.
Using Corn to Diversify
By investing in a commodity such as corn, you reduce the risk in your portfolio. If you only invest in equities or funds, you have a greater chance that your investments will be devalued at some point. Diversification ensures a more stable growth of your assets. But you knew this already, that’s why you’re here!
Corn as Fuel
Maize is used to produce biofuels such as ethanol. In South America ethanol is widely used for cars. But the demand for biofuels is also increasing in the European Union. This can make an investment in corn interesting.
Corn is Trendy
Trading in corn is in line with an investing global trend. With the emergence of new markets such as China, India and Brazil, the demand for both food and energy is increasing. As a result, the demand for a raw material such as corn can increase significantly.
At the same time, maize also fits into a world where climate change is receiving more and more attention. People are looking for biofuels, and corn can be used for that purpose. Rising temperatures also increase the risk of future crop failures. This makes it even more attractive to invest in maize.