How to Invest in Timber Stocks for Wealth

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To invest in timber stocks for wealth, pay attention to the housing cycle and whether new houses are being built. Consider investing in timber in Asia or Brazil where lots of development is going on with advice from an investment consultant in this free video on investing.

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Video Transcript

Have you looked around your neighborhood and seen all sorts of new homes and buildings and well what's the one thing that they all have in common? Hi I'm Roger Groh of Groh Asset Management. To build much these days you need wood and to get wood what do you need? Trees. So today we are going to talk about publicly traded companies that own lots of timber. Why? Well if you believe in long term that the demand for housing is going to go up and the demand for building is going to go up they're going to need wood again and for sure trees will be part of that. Remember most of the growth in the world is not here in the United States, most of the growth in the world is in Asia. The reason is you have got a billion people in India and you've got a billion people in China and they want places to live and they import their timber from the United States or at least a big part of it. Three publicly traded companies that have timber holdings would include Plum Creek, Rayon Air and Timber West. Timber West is based in Canada but really the same idea holds. You need trees for new homes and new buildings. One big warning, these stocks are very cyclical. When housing prices slow down you should expect that the price of these stocks are going to go down. On the other hand as housing building goes back up you should expect the price of these will also. Could there be another play here? Maybe. Outside the United States as I mentioned there are other places in Brazil for instance where there is quite a bit of timber being cut down today and you can play timber stocks in Brazil. I would be very careful about doing that and if you are considering timber stick to the US. Hi, I'm Roger Groh. I thank you for spending a few minutes with me and that's a little bit about timber stocks.


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