Comparing Land And Market Growth Against GDP.
Land assets traditionally appreciate at a slower pace than high-growth technology equities. However, when tech and broader markets become stretched, suppressed land valuations offer a compelling defensive profile: a high probability of upward mean-reversion or capital preservation while inflated assets undergo a drawdown. Once that relative rebalancing occurs, rotating capital back into growth assets becomes the natural next move.
Also, comparing Land stocks with tech stocks purely on a price basis is unfair, as land stocks typically pay juicy dividends, while tech stocks typically pay little or no dividend at all.
We therefore compare the price of land stocks to the world GDP growth first.
The ratio of a basket of land stock prices to the world GDP:
The stock tickers integrating our basket of land stocks are: T-FPI: Farmland Partners Inc; T-LAND: Gladstone Land Corporation; T-LND: BrasilAgro-Companhia Brasileira de Propriedades Agricolas ADR
While it may seem that land stocks do not increase in value against GDP, they do correct from time to time. And more important, all our land stocks pay juicy dividends which the world GDP does not (dividends not shown in the chart). So the trick can be to lock a 10% dividend on the land stocks which then can be used in many ways such as: (1) As a lombard loan collateral on DeGiro or SwissQuote; (2) As a dividend yield to invest in tech stocks; (3) As a hedge to swing back into tech stocks after a correction; (4) All of these depending on the situation.
The ratio of a basket of land stock prices to Gold:
Cointegration model of T-FPI against T-SPY:
We are now doing a cointegration model of T-FPI (Farmland Partners Internation) against the T-SPY (State Street SPDR S&P 500 ETF Trust) to check their price spread and whether T-FPI (black line) is below or above its average against T-SPY (blue line).