Blog

Investing in Teak Wood Forestry

I have a client that has checkbook control of his IRA funds and he was explaining to me an investment strategy that I had never heard of. And that is investing in Teak wood forestry. I find this to be another fascinating investment strategy; one that I’m sure most investor don’t even know is possible to invest in teak wood forestry.
Here is how he explained to me.
This investment has outperformed all major stock indexes during the past 25 years; it has an annual growth of 15%. Teak is a perfect investment that hedges against a falling US dollar. It also is a green investment that slows the greenhouse effect and to a lot of investors this is an important factor. Of all the hardwood species it is seen somewhat like gold among the precious metals. It is used in shipbuilding, fine furniture, door and window frames as it is a strong durable stable wood.
Now that the supply of Teak from natural forests is diminishing and the demand continues to increase, the trend now is the use of plantation grown teak. It is simple to grow in comparison to other hardwood species. Given the growing demand for teak wood and the likelihood that natural forest sources will soon be unable to meet it, investing in Teak plantations can yield high, long term returns on his investment.
Teak plantations date back as far as 150 years in India and Myanmar, plantation establishment has accelerated over the past 20 years. In the future, plantation will probably be the most important sources of teak. As demand for plantation grown Teak grows, so will the value of your investment. Proper due diligence on plantations is critical just like it is for any investment.
This is just another example of the type of alternative asset you can hold in your checkbook control IRA. True diversification is key to our retirement accounts success. Remember true diversification isn’t just large cap, mid cap, small cap and bond funds. That’s 100% stock market based investing. There are so many investment strategies available to us outside of the stock market. There is just no reason to be 100% in one asset class.
Remember to continue to educate yourself on the power of IRA owned LLCs. And as always contact us if you would like more information.
Timothy Schubert