My alternative investment in teak plantation, Panama

“Timber is one of the safest and steadiest growth investments available, protecting an investor in times of inflation, and providing returns that have beaten almost every other investment sector over the past 40 years. Teak in particular offers one of the best values and highest yields in the timber sector. It is a small niche segment of the timber industry and is managed by smaller, privately owned companies rather than by big institutional operators…” (read more about teak investments on http://www.nuwireinvestor.com/howtos/evaluating-teak-and-timber-investment-opportunities-53585.aspx)

Investing in a teak plantation year 2007 was my very first alternative investment. It was exciting from the very beginning, starting with convincing my girlfriend about the great advantages this investment had to offer, since I didn’t want to take on the risk alone... The investment time is very long (20 years), so my girlfriend and I made a huge commitment back then to each other (even though a 2^nd hand market for the investment exist, but will most likely not generate as good ROI as sticking to the original investment plan). Apparently she is happy both with the investment and me, since we are now married and have a wonderful baby!

This investment company (Teak Invest, http://www.forwood.com/en/) started actually quite early with teak investments, around year 1999/2000. Already back then I was keen on investing with this company, but since a capital growth rate of about “only” 10% was predicted I chose to continue with stock investments, where I had a significant higher capital growth rate thanks to my successful investments on the stock market.

One of the reasons why I later on chose to invest in this alternative investment is that it has a steady growth pace and is less volatile than the stock market. I used to do quite well for an amateur investor on the stock market, thanks to being well informed about stock market opportunities as well as the micro- and macro conditions affecting the stock market. However, I had some changes in my life that distracted me from the stock market information flow, which made me rethink my investment strategy. In order to be on top - and stay on top - when investing in stocks you need to be continuously well informed about what is happening with your investments. Bad news on the stock market can quickly affect the value of your investment negatively. I needed an investment type with slower pace, both information flow- and volatility wise. Therefore I found the teak investment as a great opportunity: stable growth and I did not have to be on top of the information flow (as there is not much information to consider and act upon).

So far I am very happy with my investment. I get regular updates about the plantation and apparently the plantation I invested in is the most prosperous among Teak Invest’s plantations this far. Hopefully it continues like that! In terms of return I am also content. If we assume that the investment grows with 10% per year this would give us, now 5 years after the investment, a return of 61%. However, I actually bought the investment during a promotion where I got 10% off the regular investment price. Considering this fact I have made a 79% increase of my investment this far, assuming that the real value of the investment still was the original price without promotion. Not bad at all!

One perk I really appreciate about this investment is the opportunity to visit the plantation. The investment company has regular trips to the plantation and I plan to make a trip to see my investment in a few years together with my family, combining it with vacation. I think the teak plantation visit would be a terrific way to teach my children about getting interested in the private economy and understand different ways to saving and investing their money.

Tectona Capital (http://www.tectona.se/) is another investment company offering teak plantation investments in Panama (for as little as 5 500 kr, i.e. about 600 EUR). I have followed this company for a while and it seems to be doing well and has expanded its business, which always is a good sign for successful companies. Tectona Capital also offers a property fund investment, focusing on the Panama property market. I will write more about property investments later in my blog, so stay tuned and subscribe to my blog, don’t miss out these interesting stories!