Timber investment was the secret of institutional investors, for over 100 years. They were quietly making double digit returns whilst the average retail investor struggled to make a good return on their own portfolios. Forestry investing now though is no longer just for institutional investors and enlightened individuals are now turning to forestry as a way of diversifying their portfolios.
Traditional financial wisdom always talks about diversification, but to most investors and advisers, that means a diversified share portfolio. In reality an investor needs diversification outside of equities into a completely uncorrelated asset class. Forestry investment provides that solution and research shows that forestry has a much better risk return ration than all other investment classes apart from small cap equities.
The other very compelling reason for timber investment is that it is a win- win investment for both you and the planet. Scientists have reported that the World used to have 40% of the Earth's surface covered by forestry. Due to man, this has been reduced to only 13%. In fact it is calculated that 20% of all green house gas emissions are caused by deforestation. A number of countries that have lost a lot of their ancient forests are now reversing their policies and are actively encouraging reforestation. This makes forestry an ethical investment.
The financial case is in my opinion solid whether you are interested in ethical investments or not. Investments in forestry start at about 3,500 and can deliver a very enticing return of between 7% and 15% annually. Returns will differ depending upon the species of tree you invest in and the size of the investment.
My personal favourite forestry investment is Teak. This is the best hardwood you can invest in and there is significant World demand for the wood. It is used in hardwood decking, furniture, windows, door frames and yacht decking. It produces a natural oil that makes it water resistance and the young trees are impervious to pests and disease. In fact after 2 years they are resistant to fire as well. The minimum investment in Teak is 3,500 and this will deliver you an annual return of 12% annually over a 17 year period. If you invested larger amounts you could make a annual return of up to 15% over the same period annually
Some readers may feel that a 17 year investment is too long for them to make their returns. If this is you a timber investment with a shorter period is Eucalyptus. Again this species of tree has unique properties used in medicine and industrial processes, which ensures it has world demand. The time period for this species to meet full maturity is only 8 years and investors can expect to make a return of between 10% and 13.5% a year. Investors require a minimum capital of 6,250 to invest in this.
Governments are now waking up to the fact that climate change is the greatest threat to mankind. The old policies of deforestation are now being stopped and illegal logging is being clamped down on. Investors are also looking for green investments and in my opinion, investing in timber makes sense to the planet and to your wealth.
If you thought investing in timber required significant levels of capital or the returns where not sufficient to consider as an investment. Think again, the traditional asset classes are no longer the best asset classes for the new world we are in. Investment is going through a paradigm shift make sure forestry is you asset class of choice.
Traditional financial wisdom always talks about diversification, but to most investors and advisers, that means a diversified share portfolio. In reality an investor needs diversification outside of equities into a completely uncorrelated asset class. Forestry investment provides that solution and research shows that forestry has a much better risk return ration than all other investment classes apart from small cap equities.
The other very compelling reason for timber investment is that it is a win- win investment for both you and the planet. Scientists have reported that the World used to have 40% of the Earth's surface covered by forestry. Due to man, this has been reduced to only 13%. In fact it is calculated that 20% of all green house gas emissions are caused by deforestation. A number of countries that have lost a lot of their ancient forests are now reversing their policies and are actively encouraging reforestation. This makes forestry an ethical investment.
The financial case is in my opinion solid whether you are interested in ethical investments or not. Investments in forestry start at about 3,500 and can deliver a very enticing return of between 7% and 15% annually. Returns will differ depending upon the species of tree you invest in and the size of the investment.
My personal favourite forestry investment is Teak. This is the best hardwood you can invest in and there is significant World demand for the wood. It is used in hardwood decking, furniture, windows, door frames and yacht decking. It produces a natural oil that makes it water resistance and the young trees are impervious to pests and disease. In fact after 2 years they are resistant to fire as well. The minimum investment in Teak is 3,500 and this will deliver you an annual return of 12% annually over a 17 year period. If you invested larger amounts you could make a annual return of up to 15% over the same period annually
Some readers may feel that a 17 year investment is too long for them to make their returns. If this is you a timber investment with a shorter period is Eucalyptus. Again this species of tree has unique properties used in medicine and industrial processes, which ensures it has world demand. The time period for this species to meet full maturity is only 8 years and investors can expect to make a return of between 10% and 13.5% a year. Investors require a minimum capital of 6,250 to invest in this.
Governments are now waking up to the fact that climate change is the greatest threat to mankind. The old policies of deforestation are now being stopped and illegal logging is being clamped down on. Investors are also looking for green investments and in my opinion, investing in timber makes sense to the planet and to your wealth.
If you thought investing in timber required significant levels of capital or the returns where not sufficient to consider as an investment. Think again, the traditional asset classes are no longer the best asset classes for the new world we are in. Investment is going through a paradigm shift make sure forestry is you asset class of choice.
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