Various Benefits and Risks of Timber Investment

Among many other alternative investment options, timber investment gained most popularity throughout the world. Apart from the expert investors, normal people are also investing in timber for various reasons. Unlike other options, timber investment contributes towards the environment and also offers high returns.

Here are the benefits of investing in timber –

High Return

This alternative investment option is famous for its high return. In the past 25 years, timber surpassed almost all other stock markets in terms of returns. Timber offers investors with an average annual return of 15%. There are few other options around the world which are as high yielding as timber.

Protection against Inflation

In the past few years, the world economy experienced inflation at its worst. Numerous people became the victim of inflation. However, with the help of timber investment, a person can secure a great future ahead, which will remain unaffected even during inflation.

No Relation with Other Assets

Stocks and bonds depend on each other. Apart from these two options, almost all other investment options are inter-related, when it comes to the return. However, timber does not depend upon any other assets. Therefore, one can invest in timber with much hassle. On the other hand, people who put their money in some other option, have to keep an eye on many other things, which find the rate of return.

Environmental Benefit

This is the unique benefit of timber investment upon other available options. Timber absorbs the excess carbon in the atmosphere and helps create a natural habitat for animals. Moreover, for each timber tree cut down, forestry experts plant one or more trees in the plantation area. This helps build a greener and better environment for a better future.

This investment process has certain risks, which are quite negligible. They are –

Natural Damages

The forestry experts plant the timber trees throughout a wide area. It is so big that people often think of it as a forest. Natural disasters are quite common in such places. Forest fire breakout, pest attack, sudden storm, soil erosion are some of the most common natural disasters that can damage timber trees. However, in case of any such damage, an investment company replaces the damaged tree with a timber tree of the same age from their own nursery. Moreover, professionals are there in the plantation area to make sure most safety to the trees.

Greater Liquidity Time

This investment option is the best for people looking for a long-term investment. A timber tree takes around 12-15 years to mature. Therefore, the overall investment process takes around 15 years to produce the results. Though one can cut down the trees before the ripe time, it is impossible receiving the projected amount of return in such case.

Timber investment gained huge popularity among normal people, as well as, investors from around the world due to many benefits and low risks. People, who want to make authentic investment, should choose timber investment and take a step ahead towards a great future.