Bainbridge Island, WA (PressExposure) May 02, 2012 -- Forestry Research Associates (FRA) is welcoming an article by Pictet-Timber fund co-manager Gabriel Micheli in Investment Week, giving tips to anyone considering investing in timber.
Mr Micheli is keen to point out the potential returns that can come about as a result of opting for timber investments, which will be underpinned by real growing demand for timber products in emerging economies such as China and India.
He said that wise investors are "waking up" to the environmental "megatrends" in the market. These include the realisation that growing forests can provide communities with income as they provide potential for carbon trading arrangements. As a result of these arrangements, developing countries can make money from developed nations through carbon trading. This is possible because trees absorb huge amounts of carbon dioxide from the air and therefore provide one of the most cost-effective means of reducing carbon emissions.
Mr Micheli added that investors are regularly seeing their returns from timber investment exceeding returns on stocks and shares investments. He points out that between 1990 and 2011 the NCREIF Timberland index returned 10.7 per cent each year. He claims that this shows that timber has a "key role" to play in any portfolio that is diversified against risk.
He claims that the demand for timber is coming from the nations that are desperate to get their hands on raw materials to continue their housing and infrastructure developments. At the same time, supply is not keeping up with the pace, which will drive prices up.
"Along with Mr Micheli, we are confident that timber prices will rise along with demand in the coming few years," stated Peter Collins, the analysis partner at FRA, a research and analysis consultancy specialising in forestry investment.
He added, "Investing in sustainable timber growth, through firms such as Greenwood Management and Pictet-timber fund can provide careful investors with the chance to make a health return form an ethical investment -something that is not that easy to come by."