A recent article in the Financial Times by Nyree Stewart has advised those investing in timber to think about the risks and establish their expectations at the correct point in order to get the best from the asset class.
The article explains that investing in forestry has become more popular in light of the fact that the asset class is a good hedge against rising inflation. It is also very loosely correlated with the overall economy, as timber prices often raise during difficult economic times.
However, Stewart urges those timber investors considering investing to think carefully about the expected use for the timber they are investing in, and also to think about the region in which they are going to invest. In 2010, forestry covered over a third of the world’s land area, so the choice is enormous.
We would suggest that investing in sustainable plantations is one of the best ways to start investing in timber. The demand for sustainably produced timber is expected to outweigh supply before long and prices will be driven up as a result.