Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How To Play Marc Faber’s 20% Market Drop

Marc “Dr. Doom” Faber has amassed quite the following in the financial world given his outspoken nature and uncanny ability to time the markets. This year has seen Faber urge investors to store their gold overseas and a warning that no matter who holds the Fed chair next, he will continue to print loads of money. Faber’s most recent prediction calls for a drop in the markets, as he has explicitly stated his bearishness for the global economy for some time now [for more economic news and analysis subscribe to our free newsletter].

iShares Gold Trust(ETF)

“I think here we’re going to go down 20 percent from the recent top at 1,470. The technical position of the market is poor and the corporate earnings are worsening. And I believe that if the statistics were precise – which they aren’t – (…) I think there’s hardly any growth” said Faber. Luckily for investors, Faber also stated what he thinks will be a good investment for the coming market dip; farmland. He called farmland one of the most important investments you will ever make, and the math weighs heavily in his favor.

Historical data reveals the appeal of this timeless hard asset; between 1987 and 2004, farmland prices averaged annual increases of 4.8%. What’s even more exciting is that prices have gone onto appreciate even more rapidly in recent years thanks to record-low interest rates and steadily growing demand for commodities. Farmland prices have averaged annuals gains of 15% between 2004 and 2008, showcasing the ability of this asset class to deliver uncorrelated returns to broad equity markets [see also Checking In On Marc Faber’s 100% Certainty of Another Recession].

Experts have expressed their concerns that land value increases of this magnitude are unsustainable, although they have also acknowledged that increasing food demand from all over the globe is a key factor that would prevent a major collapse. It is also worth noting that investing in farmland is a relatively difficult task, as many companies who own farmland also have a fair amount of other operations impacting bottom line returns.

For those who look to follow Faber’s advice, there are a few private funds that specifically buy farmland out there, but there are also indirect options that may be a bit less of a hassle. The Market Vectors Agribusiness (NYSEARCA:MOO) invests in global agribusiness firms who will see the benefits of their land increasing in value. Investors can also use the Rogers Intl Commodity Agric ETN (RJA), which invests in various agricultural commodities futures. As farmland continues to surge it stands to reason that its underlying outputs will do the same, making RJA an enticing buy.

This article was originally written by Jared Cummans, and posted on CommodityHQ.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.