Timberland Investment
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Scotiabank Declares Lumber Its Top Investment Pick For 2013

Scotiabank Declares Lumber Its Top Investment Pick For 2013 | Timberland Investment | Scoop.it
After four years of being the forgotten commodity, lumber is back in the spotlight, named Scotiabank's top pick for investors for the coming year.
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Once a diversifier, commodities now correlate highly with equities

Once a diversifier, commodities now correlate highly with equities | Timberland Investment | Scoop.it

“The commodities story is changing subtly from one where the tide is lifting all boats to one where the supply side of the equation is becoming really important,” said Ewen Cameron Watt, London-based managing director and chief investment strategist for BlackRock (BLK) Investment Institute.

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Historically, there are two favored rationales to invest in commodities — diversification to equities and inflation protection, said Tapan Datta, principal in the global asset allocation division at Aon Hewitt based in London. “Both characteristics have become problematic,” he added.

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Some institutions have attempted to mitigate the volatility and risk of long-only strategies by investing in active and/or hedge fund commodities strategies. ... Others have focused on niches. For example, forestry and timberland are commodities in which “biology is entirely on your side,” BlackRock (BLK)'s Mr. Cameron Watt said. Storage cost for timber is a benefit to investors. In comparison, the storage cost of corn or copper can hurt returns when supply exceeds demand.

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