One investor thinks so
By now, we’ve all heard about how avocado toast is somehow solely responsible for the dire financial straits of today’s average millennial. But if you were to ask one investment manager who recently spoke with CNBC, putting money into avocados in a slightly different way could ironically be the key to a sound fiscal future.
In a recent appearance on Capital Connection, Stephen Diggle, who heads Singapore-based Vulpes Investment Management, discussed how agriculture serves as an idiosyncratic niche with “very good yield characteristics”. Translated from the language of Wall Street to that of Main Street, Diggle roughly means that this class of investments can offer better value than other sectors.
Specifically, Diggle sees investing in New Zealand avocado production as “an area where we see both growth and income generation.” While New Zealand isn’t the world’s largest exporter of avocados (a title that still belongs to Mexico), a growing taste for the still-trendy green fruit in Asian markets could pave the way for increased production.
“Hong Kong and Singapore act as the harbingers of what broader Asian consumers do,” Diggle told CNBC. “And right now, Singaporeans and people in Hong Kong are eating avocados and we'd expect more and more Asian consumers to do the same thing."
It might seem silly to stake your financial hopes on avocado, but it seems to be an opportunity with a lot of upside for those who can tolerate some risk in their portfolio. Diggle sees the potential for return on investment from a thriving avocado concern as “way above what you can currently get from a portfolio of safe, low-risk bonds."
And for those who would scoff at your ingenious idea for liquidating your 401k to buy avocado futures, just know that it’s probably a safer bet than cryptocurrency, which Diggle says “probably is a bubble.” That’s not even to mention some of the shadier cryptocurrencies with ties to the food world that seem to pop up with increasing frequency. Neither cryptocurrency nor avocados are all that great for the environment, so the ethical investor might want to shy away regardless.
Obviously, take the financial advice of any random investor who appears on CNBC at your own risk. But how satisfying would it be to buy your own home with money acquired through avocado investments? That should at least force the boomers to find something new to complain about.