Agribusiness is basically the business feature of agriculture - growing crops for human utilization and use. In spite of the fact that agribusiness accounts for 12.1% of our Gross Domestic Product (GDP) in the six years to 03-04, it accounts for almost 25% of national merchandise exports ($26.1 billion in 03-04), is our biggest manufacturing sector and accounts for 46% of total retail spending. A stimulating economic shift has occurred over the past ten to fifteen years, in which agriculture has opened up for retail investment by investors. Anybody can now invest in agribusiness, bringing the benefits of Diversification, wealth accumulation and tax savings. WHY IS AGRIBUSINESS AN ALTERNATIVE ASSET CLASS? The rising complexity of Australian investment markets means that individual investors are no longer limited to the traditional asset classes of shares, property, fixed interest and cash. Investors now want a diversified Portfolio so that investments are across a range of asset classes, to level out market fluctuations. In particular, they want investments whose performance is not connected - in terms of movements in market prices and returns - with the other asset classes. The Australian Agribusiness Group (MG) confirms that agribusiness is negatively correlated to other asset classes and the addition of agribusiness to a Portfolio can increase returns and reduce Risk. The returns from agribusiness investments do not depend on the share market, property market or existing levels of interest rates. They depend on the market for the particular product being grown. With the right project, backed by a sound convincing manager who has established the market for the produce before releasing a project for investment, investors can feel confident that they have bought a wealth-creating asset. WHY INVEST IN AGRIBUSINESS? The chief benefits of agribusiness investment are:
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