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Is it possible to protect my Capital by investing in Forestry?



It is well known that over the last 30 years Forestry has outperformed traditional investment vehicles such as stocks, bonds and property, consistently showing investors higher returns.
Forestry is a strong inflation hedge because timber prices continue to float above the rate of inflation even in the face of difficult economic downturns and poor performance elsewhere.
The IPD annual Forestry Index, 133 commercial forests returned 18.4% last year and have averaged a staggering 21% a year since 2010 which is outgrowing the FTSE 100 share index which returned an average of 7.7% and commercial property which made  approximately 9-10%.

So why does forestry do so well?
Low Volatility
Forestry gives investors a level of price stability over a longer term period that is more comparable to fixed income instruments as opposed to higher performing equity instruments.
Because trees continue to grow if the price for the timber is low then you can simply let the trees continue to grow until a desirable price is reached, this means that you get the right price and the quantity of timber would have increased. When timberland is included in a diversified portfolio, returns tend to smooth over time, thereby reducing the overall portfolio’s risk level.
The Diversification Benefits
In addition to lower risk returns and low volatility, timberland investments enjoy low correlations with other asset classes. Combining timberland in a diversified portfolio can lead to a more efficient portfolio. There tends to be a positive correlation between timberland returns and inflation. This indicates to a certain extent that timberland investments provide a hedge against inflation.
Supply and Demand
Historically, demand for wood products has a high correlation with worldwide population growth. World population is expected to increase 41% until the year 2050.
Liquidity
Although timberland investments are relatively illiquid, liquidity is normally achievable in a moderate period of time.
Environmental Responsibility
Timber is a renewable, natural resource that provides ecosystems with benefits such as clean air, clean water, and wildlife habitat and carbon sequestration. Usage of timberland plantations ensures the preservation of natural forest lands for future generations.
Until a few years ago, retail investors were mostly shut out of this market. The deals were too big, involving thousands of acres and tens of millions of dollars.
Big investors, like university endowments and insurance companies, have long allocated money to timberland in places like Oregon’s fir-and-spruce forests, Georgia’s pine plantations and Appalachia’s hardwood groves.
Now it is possible to invest in forestry directly with land ownership via EcoCrops International to view our website and see the latest forestry investments we have available then please go to www.ecocropsinternational.com

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