Ever thought of Forestry as an Alternative Investment?

I don’t know about you but I have found the best way to diversify my investment portfolio is to invest in forestry. In the UK forestry has had a long history as investment for high net worth individuals and more recently for the smaller investor, such as myself.

The tax breaks associated with forestry aren’t to be sneezed at either, there is no income tax or CGT payable and once forestry investments have been owned for over two years they are free of inheritance tax liability.

While yields can be somewhat volatile, due to the nature of the product the investment can be stored on the stump until the market value goes back up. This is the advantage with forestry plantations as opposed to other crops as once the trees are mature they can be left to increase in value.  In 2007 forestry saw a 31.6% total annual return, this fell in 2008 to 7% but that was still well ahead of the commercial and residential property sectors and the stock market.

However, this is a long term investment, it can take anywhere between six to ten years to harvest a plantation, during which time there’s no income. This type of investment would suit those looking to add to their pension fund or those that already have a steady stream of income coming in.

Forestry Update is sponsored by Greenwood Management. For more information on investing in Forestry please click here