Putting Your Faith And Your Money In Mother Nature by pepep25

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									Trees are slow growing, not very exciting but indispensable to the
environment. Surely, we have had enough of the stock market, mortgage-
backed securities, credit default swaps, collateralised debt obligations,
futures, forex and hedge funds?

It is a mistake to ignore timber investments as a significant part of any
investment portfolio. It is a stable area for diversification and dare it
be said; money can grow on trees. Consider the following 3 points when
reviewing your nest eggs.

Wood products are everywhere. Demand is consistently rising, and
investment in the basic raw materials will hedge against inflation.

Between 1987 and 2010, the yields on timber investments have been on
average 155%. Compare that to Standard & Poor's top 500 stocks at less
than 10%.

Furthermore, the Great Depression saw stock market falls of up to 90%
while the US timber index actually rose in value by 233%. (These
statistics are from the National Council of Real Estate Fiduciaries or
NCREIF).

There are three ways to go when getting into timber investments. Firstly,
do your own research and go it alone in buying into the asset class
through timber and timber-related products. Think of owning your own
forest, paper and construction capital goods. The second is to deal
through companies that specialise in the timber class. The third is to
buy into a nest egg exchange-traded fund that contains all or mostly
timber based stocks.

The second and third alternatives above are of course stock exchange
options and are more likely to suffer from the NYSE fluctuations also
mentioned above.

So timber and wood products are definitely worth investigating as a
direct investment. It is surely more reliable, genuine and secure than
putting your savings into the secondary level of the 'house of cards
known as the stock exchange. Even timber companies ride the roller
coaster while the trees themselves grow ever upwards majestically above
the human fray. As an investor there is always the option to allow your
assets to continue growing until the price is just right. With this comes
peace of mind.

Pine forests are good class of timber investment and definitely the more
traditional alternative. But pine is a softwood and hardwood makes for an
even better investment. Search the investment press for opportunities in
timber products in tropical growing areas such as Costa Rica or Sri
Lanka. Yes, they can be politically unstable but when peace comes the
things, they have been fighting for are still growing and in demand. For
the more nervous investor, there is a very good scheme for hardwood in
Germany.

It is always wise when investing for stable growth to have a whole range
of different opportunities in your portfolio. So timber all the way is
not the wisest course, but it is well worth considering for stability and
diversification reasons.

								
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