Bainbridge Island, WA (PressExposure) December 22, 2011 -- A recent report from Seeking Alpha claiming that now is a great time to invest in timber, has attracted support from Forestry Research Associates (FRA), an analysis and research consultancy specialising in forestry investment and sustainability.
Although, on the surface, the fact that timber prices have fallen slightly lately could seem like a negative trend for forest investments, FRA supports claims from analyst Kevin McElroy, that this is a great time to buy into the industry. The thinking is that most varieties of timber grown in the North America region are cheaper than they were this time last year. However, the housing market is expected to bottom out very soon and, as a result, prices could soar again before too long.
Wood prices are generally on a growing trend, claims FRA's analysis partner, Peter Collins who explained, "Between 1987 and 2007, timber's average return on investment was an impressive 15.7 per cent, far exceeding gains made by those who invested in stocks and shares."
Mr Collins added, "Forestry is becoming a go-to asset class among savvy investors who are looking to protect their portfolios against risk by opting for an investment that is correlated highly with inflation, but has little correlation with equity markets."
With widespread predictions that the US housing market will bottom out in 2012, the chance that timber prices could soar off the back of growth within the construction industry, for example, could be too much for investors to resist, claims FRA.
FRA supports investment into sustainable forestry plantations and projects in developing countries, such as the projects run by Greenwood Management. It sees these project as a great way to diversify an investment portfolio while helping to prevent deforestation of some of the world's most vulnerable and valuable forests. "The plantations of non-native tress that firms like Greenwood crate can offer alternative sources of timber and charcoal to cutting down valuable native forests," concluded Collins.