Container Investing Is An Alternative To Traditional Investments

Many investors are growing tired of worrying about the poor performance of stocks and bonds in their portfolio. To relieve the pressure, a growing number are seeking alternatives to the traditional investments they hold.

At the top of the list of the most popular alternatives is investing in containers. There are three reasons for this investment’s rise in popularity.

  1. It is a hard asset.
  2. It produces income.
  3. There is a growing demand.

Hard Assets

In the event of currency devaluation or rising inflation, hard assets have proven that they can protect your portfolio against losses experienced by traditional investments. In fact, hard assets are negatively correlated to stocks and bonds; meaning that they tend to behave differently and move in the opposite direction of equities. This is because hard asset investments have a fundamental, intrinsic value. Let me explain …

In the last several years, Warren Buffett has purchased two railroad companies, the Burlington Northern and Santa Fe Railroad. Why did he buy these? A railroad, like shipping containers, is a hard assets that makes money by moving other hard assets. Warren Buffett invested paper money into hard assets, so that if the dollar was to drop to zero it has no effect on his investment, he still owns a railroad!

Making an investment in hard assets is more appealing and much simpler than it was years ago. In today’s marketplace there are an increasing number of alternative investment opportunities that are easier to buy into, than stock was “in the old days.” A container investment is definitely one of the easiest.

Income-Producing

People on a fixed income, like pensioners and retirees, would benefit greatly from investments that earned a steady revenue and supplemented their retirement.

The shipping containers that investors have invested in are leased to shipping and logistics companies, and generate a monthly income for transporting different types of cargo. The revenues generated from the lease of the containers provide additional income for the investor.

Over the lifetime of a container, which is 10 years or more, leasing revenues can add up to a large sum of money for investors.

Rising Demand

As the world economy continues to grow, it can be expected that the demand for shipping containers will increase as well. With countries across the globe working toward increasing their GDP, more and more containers will be needed to facilitate their growing imports and exports.

In the last couple of years, two significant projects have contributed to the long-term demand for containers. The Panama Canal expansion and China’s One Belt, One Road initiative have revived trade routes and opened the door to more capacity, that will continue to support the need to ship cargo.

Summary

The most appealing aspects of an investment in shipping containers is that there is a constantly rising demand for the income-producing hard assets. Across the world’s busy highways, railways, and seaways, shipping containers are generating wealth for countries and investors.

Shipping Container Investments Can Protect Against Inflation

When planning and managing your investments, inflation is an influential economic factor that you must take into consideration, and carefully plan for.

Inflation is the rate at which prices for goods and services is rising. For example, if you invest in a stock that provides a 5% return, but inflation is 6%, you are actually losing buying power.

Over time the price of buying things, from a loaf of bread to a new home, often rise. When these increases become excessive, your purchasing power will decline rapidly. This presents challenges for consumers and investors.

When it comes to protecting your investment portfolio from the adverse affects of inflation, there are a few strategies you can adopt to avoid unnecessary hardship; one of which is investing in shipping containers.

In addition to generating income, shipping containers provide diversification too. The container shipping industry gives investors access to countries that may not be experiencing inflation. Diversifying in assets that work abroad, such as shipping containers in emerging markets, provide protection for your portfolio by operating outside the perils of the domestic economy.

Like other commodities, such as real estate investments, the value of container investments tend to rise when inflation is rising, and therefore provide protection against the decreased value of a currency.

rising inflation investing quote

“Inflation is going to be something that may gradually affect your portfolio. Whether that effect is positive or negative depends on the actions you begin to take. You want to be diligent about your investments knowing that change is afoot.” – Craig J. Ferrantino, President of Craig James Financial Services.

Economists agree that inflation is an economic phenomenon that you can expect, with near certainty, will occur at some point in time in your investing career. So, it’s important for you to understand how to invest and plan in such a way that your assets maintain their purchasing power. Consider this … placing money in a saving account will cause a major loss in purchasing power by retirement. Hypothetically, earning 4% in a savings account while inflation grows at 7% makes you feel 4% richer, when in fact you are 3% poorer.