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Well the answer seems to be Yes!
Let’s see what the Press has been saying about forestry related investments:
Smartmoney Magazine
“Timber has only had 3 down years in the past 47 years……have beaten the stock market with less risk”
Bloomberg Wealth Manager
“Indeed as an asset class, timber – a renewable resource with a constant demand – stands out as a remarkable stable investment”
The Economist Magazine
“Average annual returns on timber…..have outstripped those from leading global stock indices, property, oil and gold for the past decade”
The Financial Times
“Returns 5 times higher than equities or bonds”
So it seems that money does grow on trees!
The other advantages are that returns on forestry are totally uncorrelated to equities or bonds. They seem to provide a low risk asset class which is ideal for portfolio diversification.
The other benefit is that they are a GREEN investment. They are socially responsible, ethical and environmentally friendly.
That is all well and good, but investing in trees can be a very long-term commitment if you invest from sapling to eventual harvesting! You need to know what trees to invest in and what your final market is to make profits. Plus you need large amounts of capital to get started. The barriers to enter to this lucrative investment class can seem endless!
So going back to my original question – Does Money Grow on Trees?
Well yes and no! But it can certainly grow IN trees. An example of this arises in the fragrant resinous heartwood of the Aquilaria tree which grows naturally throughout South East Asia. In response to fungal disease or insect attack the Aquilaria produces a resin at its core as a defense mechanism. This resinous heartwood is known as Agarwood. Agarwood is the most expensive resinous wood in the world.
Aquilaria trees that come on to produce Agarwood are extremely rare in natural forests. This has resulted in severe deforestation that has lead to the Aquilaria tree being listed as an endangered species by the CITES (Convention on International Trade in Endangered Species of Wild Flora and Fauna). Trading of Agarwood is restricted to certified plantations to protect natural tress forests from illegal logging.
A unique and patented inoculation process has been developed to ensure that Aquilaria trees will produce Agarwood. This produces a 100% success rate in the production of Agarwood.
The market for Agarwood is very well established. It is used in the perfume industry, Traditional Chinese Medicine and in religious ceremonies. The largest markets for Agarwood are found in the Middle East, Japan, Korea and Taiwan. These markets have been buying Agarwood for centuries. Currently demand greatly exceeds supple. The main export hub is Singapore, which accounts for over US$2billion worth of shipments per annum.
It is now possible for small individual investors to take advantage of this unique investment opportunity without having to get involved in the actual growing, maintenance, inoculation and harvesting of Agarwood.
If you would like to find out much much more about this opportunity please call me on 2522 5488 or email me at pedro@eanson.com
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