Why Invest In Forestry
Investor interest in forestry investments in growing ! The recent volatility of stock market equities and global real estate prices mean today investors are seeking to diversify their investment portfolios into alternative assets such as forestry. Jeremy Grantham, a respected US Fund manager, believes an investment in forestry is the best long-term investment there is, commenting that timber is the only asset to have grown in three out of the four market collapses of the 20th century, risen steadily in price for 200 years and has returned an average of 6.5% a year for the last century. A forestry investment is attractive, being low-risk and high return by nature and the lack of correlation with other major market indices makes it a near perfect asset and a secure hedge against global stock market volatility. The flexibility of harvesting means when timber prices are low you can let your investment continue to grow and harvest at a time when returns have improved.
The impact of deforestation and its effect on climate change is benefiting the timber industry with the emergence of new initiatives such as carbon credit trading rising and growing demand for renewable energy sources is increasing the value of timber as a commodity. This need to preserve natural woodland, green forests and create managed timberland puts a greater value on trees and the returns that they can generate both during growth as carbon credits and upon maturity by harvesting to make sawn and cut log returns.
Today investing in forestry is a straight-forward, social responsible investment with the added tax advantages that many global forestry investments are also SIPP compliant. You can invest in a range of sustainable forestry funds or collective forestry investments from teak seedlings, fast growing asian bamboo to tropical hardwood plantations which in some cases generate returns in just 5 years. A forestry investment is long-term investment and increasingly becoming a valuable part of a balanced investment portfolio.