Forestry Funds

Thanos

Hi all,

Some advice/opinions please on Forestry Funds.

Was reading that they are for a period of 12 years (long enough) and have an estimated return of 7.5 per year. Also that you do not get caught for tax on them when they mature and can be bought for others, children or grand-children.

So...........

Are these safe enough?
Is the return on them good/bad for the period of time?

Any other insights welcome.

Thanks.

ixus

It's been discussed a few times before here. Use the search function.

My two cents. Not worth the risk.

losthorizon

ixus wrote: »

It's been discussed a few times before here. Use the search function.

My two cents. Not worth the risk.

I always find it strange that people who will invest in bonds, shares and the like will not consider Forestry.

Some of these schemes have already matured so the OP could try finding someone who has invested in a forestry fund and has seen it mature.

I, myself have invested in a few of the Forestry Investment Plans. I think its 2012 when the first one I have matures.

When the schemes originally started they were 10 years (if its the same company).

soddy1979

I think it has merits as an investment.

It is difficult to see a decline in timber demand over the medium to long term with global population growth and deforestation.

There are definitely some tail risks that could wipe you out though, such as fire and disease, so ideally there would be some geographical distribution to the investment sites.

ixus

There are merits in the diversification aspect but, I think it's more suitable to someone who is already loaded in equities, bonds, commodities,magic beans etc.

NO ONE can guarantees you a 7.5% per annum return on investment. If you are seeing/getting those returns they are coming from your original Madoff investment (ponzi?) IMHO.

Is Ireland one of the biggest pulp/forestry industries in the EU or globally? No.

Globally, are we not moving to a digital information age making paper more redundant?

Would love to hear the counter to this..

soddy1979

It's certainly a risky investment, and for a potential return of 7.5% I would probably be looking elsewhere. However, I don't think they guarantee those returns, they just project them. That being said, I would be still be wary of any investment where the issuer estimates returns so specifically for an investor. I'm no expert on wood, but by looking at the price of lumber over the past ten years, it's difficult to see a 7.5% PA return.

As much as it is a risky investment though, it's certainly not a ponzi scheme.

I would be much more inclined to ignore the issuer spin, and assess the merits of each of the forests on their own, you could then estimate your own rate of return and decide whether it was a worthy investment.

I can't see global society making too much of a decrease in their use of paper over the next ten years; but even if they do, there will still be room for wood as a fuel source and construction material.