Should You Be Buying Farmland?

We're human -- and that means we often compare ourselves to others. I know that when I'm at a restaurant with friends, sometimes I wonder if I should have ordered what someone else ordered. And when I hear about some savvy investor investing in something, I wonder whether I should be investing in that, too.

That happened recently when I learned that the famous investor Jim Rogers has been investing in farmland in Brazil and Canada. I wondered what he knows that I don't. I wondered whether I should follow his lead. He did, after all, run the Quantum Fund with George Soros for a while, and has long been a financial author and commentator.

So -- should we all be buying farmland? Should we be abandoning our trusty dividend stocks and international mutual funds and whatever else we have committed our hard-earned dollars to?

Stick to your knitting
The answer is no. If you follow someone's lead without really understanding why they're doing what they're doing, you won't know how to evaluate the situation over time. If Rogers changes his mind and moves much of his farm money elsewhere, odds are you'll never know.

That said, we can still learn from investors we respect. With Rogers, we can note that he's essentially investing in agriculture, and we can do the same, even if we decide not to buy a bunch of raw farmland. Consider agriculture-focused mutual funds and exchange-traded funds (ETFs), for example. The Powershares DB Agriculture ETF is one possibility. It holds commodities such as corn, sugar, soybeans and wheat -- and has a five-star CAPS rating.

You can invest directly in agriculture-related stocks, too, such as:

Clearly, our 130,000-strong Motley Fool CAPS community has high expectations of these big agriculture players. And there are plenty of others. You might also just look closer at your regular mutual fund holdings. Some are already investing significantly in agriculture on their own.

The bottom line is that there are lots of paths to riches. You don't need to pick PepsiCo or Coca-Cola to make money -- though both companies are likely to keep growing and rewarding shareholders over time. You can grow wealthy via real estate, stocks, or other investments -- you just need to stay within your circle of competence.