For centuries, savvy investors and the ultra-wealthy have looked to maintain a diversified financial portfolio, one that spans a variety of markets, locations and timeframes. While the stock market is one of the most popular financial instruments amongst laymen, in reality a truly diversified portfolio requires commodities as well.
Historically, one of the most popular options in commodities for the top 1% has been timber, specifically teak. But today, there are ownership options that extend to every forward-thinking investor, not just the super wealthy.
Teak Wood vs. Stocks
The idea that teak wood is a more secure investment compared to stocks is not without grounds in financial history. Professional investors would agree that timber has proven to be less risky than the United States stock market time and time again.
Timber outperforms the stock market time and time again without the frightening volatility.
In the last half-century, commodity investments on managed timber have garnered an ROI of 15% on an annual basis. That’s a significantly brighter history than what the stock market has experienced in the same period.
Even if we take a look at the more recent financial situation, the stock market has proven to be as volatile as it always has been, with plenty of ups and downs and drastic shakeups. Comparatively, timber wood like teak has simply continued to rise in value.
Why is that, though? What makes teak wood more secure than every other commodity? As simple as this may seem — at the end of the day, it’s because we’re talking about trees.
Teak Wood Value
When we talk about the market volatility that affects investments, there is pretty much an endless number of factors to take into consideration. These factors including political instability, civil unrest, sudden changes in the Forex market, tech advancements, public scandals — the list can go on forever.
The impact from these factors is felt in almost every investment on earth — from the value of the company that manufactured your phone and laptop to oil giants in the Middle East.
Teak wood and timber in general do not correlate to this norm. The trees are planted, and they grow regardless of what is going on in the world today. It’s as simple as that. The number of external factors that affect the worth of teak wood is much, much smaller. And as an incredible advantage, teak is resistant to fire, rot, termites, bugs, etc. after age 3.
Political unrest rarely affects tree growth, and neither do industry trends or inflation. The price keeps growing as long as there’s demand, and as the population increases, the demand for wood continues to increase as well. Even when the global stock market fails, the value of teak wood keeps growing.
The markets know how valuable teak hardwood is. This can be surmised from a very simple fact — when the U.S. real estate market plummeted in 2008 and ushered in the biggest financial crisis in a century, there was only one type of real estate whose value did not suffer. You guessed it — agroforestry properties. Commercial and residential real estate took a nosedive, but the value of teak properties not only remained the same, but rose in value.
Other Benefits
For the reasons highlighted above, teak wood has turned out to be a great commodity investment for hedging in case of inflation. Lands with teak wood aren’t just a commodity bought by private investors either — financial institutions have billions of dollars held up in timber holdings. We’re talking about pension funds, banks, and even many universities. This is an incredibly low-risk investment — one that could fail only with the physical destruction of properties.
This goes for timber in general, but teak proves to be an even more interesting type of hardwood as a specific example. It’s a niche market that brings more than just a smart investment. For instance, teak wood grows in tropical areas that are beautiful vacation spots as well.
Plus, who knows, perhaps someday you could hire a moving company like Transparent International NYC to move you to a tropical paradise for good.
Panama is a country that you can visit your investment growing and even get residency down the road
Residencies and Passports
There are many countries that grow teak and appreciate foreign investments in the local teak property markets. They offer plenty of benefits to willing investors — for instance, places like Nicaragua or Panama even provide passports and residencies to foreign investors. And now, more than ever, is an incredible time to search for your “Plan B.”
How To Invest?
For as little as $6,880, you can become the owner of your own, fully titled teak parcel in Panama. Do you want to secure that your most important asset is protected? Explore residency programs through teak ownership that will ensure, YOU, have options.
Contact us today for more information.
Conclusion
Considering all of this, should you invest in teak wood? Absolutely. Any portfolio could benefit from such an investment, and it’s as sure an ROI rate as you’ll likely to get from any other type of commodity.
