Not getting the investment return you want from your money market account or certificates of deposit? Well, there is a new investment asset class, and your initial investment is probably already sitting in your pantry. Yes folks, now is the time to invest in food, or at least that is what one WSJ columnist is arguing.
Brett Arands at WSJ in this article argue that food prices are rising faster than the rate of return on traditional cash savings vehicles. Supporting his argument he cites government data showing that the annualized rate of inflation in the price of food for the average American household is now running at 4.5%, compared to 4.1% for the best 1-year CD listed on Bankrate.com.
There is plenty of reason to believe that this upward trend in prices will continue, considering the emergence of a larger middle class in places like India and China. Additionally, a large portion of our corn supply is being used to produce fuel rather than food, and since corn goes into so many of the food products that we buy this creates huge upward pressure on prices as well.
So, you want to start building your stockpile/portfolio? There is a lot of great guidance out there. The LDS (Mormon) Church has long advised its members to keep a stockpile of food in case of emergency, and has some great instruction on estimating needs for a typical family and storing food on its Provident Living website. Building your stockpile doesn’t have to be hard. Just watch your local supermarkets for good deals on non-perishable food items and stock up when the price is right, or just make a run to Sam’s or Costco to buy bulk packages.
Do I seriously think bags of rice and cans of beans will ever replace stocks and bonds? Of course not, but there is a lot of wisdom in stockpiling in case of an emergency or a shortage. And remember emergency doesn’t have to be in the Katrina sense of the word. A sudden job loss or severe economic downturn could also be considered an emergency, and having food on hand that your family can eat when money is short can definitely help you weather the storm. And to answer the question you may be asking, yes I practice what I preach and we have a stockpile of essentials like rice, beans, and wheat, plus a pantry with plenty of canned food, pasta, and free cereal from the Safeway cereal deal a couple of months ago. I even made an “investment” of another 50lb. bag of long grain rice this afternoon while I was at Sam’s. =)
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