Inflation-Proof Investments: Go Beyond Gold and Oil with These Two ...

Time for These Inflation-Proof Investments

Investors hunting for inflation-proof investments should try agriculture-related choices.

Given that inflation has a direct, adverse impact on food prices, investors have started taking note of exchange-traded products such as the Teucrium Corn Fund (NYSE: CORN) and the PowerShares DB Agriculture Fund (NYSE: DBA).

Both are futures-based funds. CORN has been a prime beneficiary of the savage drought that walloped the Midwest this summer while DBA offers a basket approach to multiple agriculture commodities futures contracts.

There are also some compelling alternatives with which to play the farm theme.

Try the land itself. Investing in farmland has proven to be a stellar inflation hedge as values of these properties have surged over the past decade. It is also worth noting that farmland, assuming one can acquire it directly is a yield play in that it provides steady rental income.

Those looking for a single stock approach to farmland can consider Adecoagro S.A. (NYSE: AGRO), which owns almost 500,000 acres in Argentina, Brazil and Uruguay. The stock is up 14% year-to-date.

Adecoagro is backed by famed investor George Soros. Soros apparently knows what he is doing because earlier this year, Adecoagro sold some land at 14 times what it originally paid.

Besides agriculture-related investments, another inflation-proof option is timber.

RELATED: Prices aren?t all that are inflated. Check out what the Fed has done to the Dow.

Many investors still do not realize just how useful timber is as an inflation hedge, but that does not mean running down to the nearest Home Depot to load up on 2 x 4's. Annualized returns for lumber have averaged 5% for over a century.

The iShares S&P Global Timber & Forestry Index Fund (NYSE: WOOD) and the Guggenheim Timber ETF (NYSE: CUT) are both options with different benefits depending on what you are looking for.

WOOD has the better yield and a lower expense ratio than its rival.

However, CUT has outperformed its rival this year by a wide enough margin that taking on the lower yield and higher fees was a wise move. Additionally, CUT's price-to-earnings ratio is less than half of WOOD's and the former's price-to-book ratio is a third of the latter's.

While the Fed floods the country with money, be sure to look at ag and timber as inflation-proof investments for your protection.

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Source: http://moneymorning.com/2012/10/16/inflation-proof-investments-go-beyond-gold-and-oil-with-these-two-sectors/

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