Now could be great time for timber investors, claims FRA
FRA said that now is a great time to have investments in forestry as the construction
industry in the US begins to recover from its long slump.
Seattle, United States, January 24, 2012 -- Forestry Research Associates (FRA) said that
now is a great time to have investments in forestry as the construction industry in the US
begins to recover from its long slump.
A recent report in Zacks Investment Research said that recent figures suggest that 2012
could be the year that the construction industry grows again. This is great news for those who
own trees or have cash invested in to timber-based exchange traded funds, who have been
hanging on to their assets in recent years. Many investors would have avoided selling their
timber assets over the past couple of years due to the slowing demand in the construction
industry. As a result, their trees will be even larger now and will be worth more as a result.
“This is the great selling point for timber investments,” stated FRA’s analysis partner, Pete
Collins. He added, “If timber prices look anything less than strong, investors can simply hold
onto their assets and wait until the prices increase. In the meantime, their assets grow further
and are worth more when they finally choose to sell.”
The report by Zacks also claims that forestry has an extremely low correlation with traditional
asset classes and therefore, provides an extremely effective way to diversify a portfolio. FRA
claims that more and more investors are turning to alternative asset classes, such as timber,
to help them to spread the risk within their investment portfolio.
Zacks' report talks about direct investment routes, such as through plantation schemes like
the one run by Greenwood Management in Brazil, where investors buy up pieces of plantation
land and receive returns based on the cyclical sale of timber assets. It also talked about
investing in funds that are based on timber, which can offer a slightly more risky option for
those interested in putting some of their cash in forestry.
About Forestry Research Associates
Forestry Research Associates is a research and advisory consultancy that focuses on forestry
management, sustainability issues and forestry investment around the globe.
Forestry Research Associates
620 Vineyard Lane
Bainbridge Island, WA 98110
Tel: (206) 316 8394