Bainbridge Island, WA (PressExposure) February 01, 2012 -- A new report on the benefits of timber investment in Money Morning, has attracted attention and praise from Forestry Research Associates (FRA).
The research and analysis consultancy has highlighted the article, written by investment writer Don Miller, as "A great place to start your research if are considering investing in forestry."
Mr Miller lists the numerous benefits of opting for a timber investment, arguing that the option is a low-risk strategy with better returns than most, or even all, traditional asset classes. In fact, Mr Miller states, "Investing in timber has proven to be more profitable - and less risky - than any other asset class for almost 100 years."
According to figures from The Campbell Group, cited in the article, timber returns have averaged 14 per cent each year between 1987 and 2010. In addition, the returns on timber are a lot less volatile than the returns on equity investments, according to the figures.
FRA supports the claim that timber investments are a good idea when the economy is struggling, as it holds its own while other asset classes falter. An example given my Mr Miller is that of the Great Depression, during which timber prices increased by 233 per cent, while stock market values tumbled by 70 per cent.
"Although the effect during the current downturn will not be felt quite as strongly as this, there are several features of timber investment that makes it attractive at times like these," claimed Peter Collins, FRA's analysis partner.
One of the best reasons for investing in timber is the lack of pressure on when the investment should be cashed in, Claims FRA. When the tree reaches maturity, if timber prices aren't great, you can simply hang on in there and watch your asset grow even further. "Most timber-grade trees grow an average of per cent per year - which means that every year you don't cut them down, they're worth about eight per cent more," explained Miller.
Firms like Greenwood Management offer great deals on timber investments, through plantation schemes in Brazil and Canada. Initial outlays needn't be more than around $10,000 and investors will get a more diverse portfolio in exchange.