iNVEZZ on Investing in Timber: Low-Risk Venture or Investment Disaster?

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Are timber investments stable, low-risk, long-term cash growers or an investment mistake waiting to happen? In a recently-released editorial, part of a series covering this alternative investment option, Frank Quin of investors’ portal iNVEZZ dissects the risks to give prospective investors all the facts needed for their timber investment decision.

iNVEZZ

iNVEZZ

The challenge for anyone weighing up potential investing in timber – whether building lumber or pulp & paper – is to pick the trends and direct the investment funds to a sector, a product or an investment vehicle.

Investors’ portal iNVEZZ recently published an analysis entitled “Timber: An Investment Disaster?,” covering the main points of consideration that every investor interested in exposure to this alternative asset class has to made before stepping into the venture. The author of the new editorial, Frank Quin, first describes the ‘big picture’ based on which “the long-term perspective on investing in timber and timber products is uniformly positive”. But while projections of global population growth, rising standards of living in developing countries and reductions in the harvesting of natural forests are all very likely to drive timber demand and prices, this perspective is in the order of decades. Accordingly, investors with an expectation for returns in much shorter timeframes should consider certain factors before investing in timber.

Quin writes: “The challenge for anyone weighing up potential investing in timber – whether building lumber or pulp & paper – is to pick the trends and direct the investment funds to a sector, a product or an investment vehicle – or in all probability a combination – which will best perform relative to other investment options over the investor’s desired timeframe.” Revealing that a later instalment of iNVEZZ’s series on timber investment will explore those trends, Quin covers another segment of this wide topic –“the threats to forests and, by extension, to timber investments and timber products”.

After dissecting the internal (disease, pests, fire and climate change) and external (indigenous claims, turf wars, government intervention) threats, Quin underlines that most of those risks can be managed by human intervention. In this note the author of the recently-published analysis also writes: “None of which is to say that investing in timber is fraught with risk! But the serious investor will take an objective and dispassionate approach to the potential threats both to the timberland and the investment before committing.”

To learn more about iNVEZZ, join, contribute your own professional or amateur expertise on the investment areas of your interest or engage with other investors or experts, please visit http://www.iNVEZZ.com.

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John Adam
iNVEZZ Limited
+44 (0) 845 8340101
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