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Timbercorp??

Discussion in 'General Investing Discussion' started by rosewaterwrx, 26th Jan, 2009.

  1. rosewaterwrx

    rosewaterwrx Member

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    Adelaide
    Quick question for those who understand investing in shares etc far better than myself.

    I was advised around May 08 to invest around $30,000 in tree plantations for pulping, with this company. I didnt go ahead with this as I didnt have sufficient time to investigate the scheme.

    The shares for this company appear to have deteriorated massively. Now my question (bare with me im learning) is....

    If I had gone ahead with this what would it have meant for me, considering I wouldnt have been actually buying 'shares' in the company?? but would have bought a section of a plantation due for pulping in 10 yrs time,

    What is the long term outlook for this company and similar schemes???
    Ive heard very negative comments on similar schemes, yet the concept sounds sound in theory to me.
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Hi Rose,

    The shares are separate to the agri-business investment you were looking at.
    Agri-business investments are similar to film investments where the capital outlay is treated as an expense and you get to claim a tax deduction for the initial outlay while owning the investment in trees (previously this also included other things that grow like fruits but Prime Minister Rudd decided to dis-allow fruits and other non-forestry investments, so basically it is now just trees).

    It's important to understand what your investment is actually going into, some agri schemes you own the plot of land and the trees, others you own the trees and rent the land. Obviously the investments have different costs depending on the manager, etc.

    What happens if there is a flood or fire where your investment is "growing"?

    Unfortunately for agri the only thing that is really good is the commission for the adviser, this is usually be between 4% to 10%.

    Most investors, obviously depending on their situation, are better off investing prudently in superannuation or tax effective investment bonds.

    Cheers,

    Dan

    PS This is general information, before making an investment decision speak to your FPA registered Financial Planner.
     
  3. islandgirl

    islandgirl Well-Known Member

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    Middle of beautiful Moreton Bay, Qld

    That's the smartest thing I've seen written for a while. Never invest in something you don't fully understand.
     
  4. Young Gun

    Young Gun Guest

    I never used to be a fan of Agri-business myself, as I never really took the time to understand it.

    Being the hands on investor that I am, I've always sort high returns via direct equities and the performance estimates on these schemes have never really excited me. Frankly without the 100% tax deduction no one would invest in these schemes and why would you. Lock your money away for 8 - 20 years, zero liquidity and all without the promise of high returns.

    But last year I took the time to have a closer look and I ended up investing about $12,500 into one of Timbercorps High Value Timber projects. And will most likely invested a similar amount in 2009.

    It suited my purposes as I wanted primarily a tax deduction, but I also got an investment and something I could benefit from prior to the age of 60(unlike super). In addition the long time frame of this investment will prevent me from spending my savings.

    Agri-business (Trees, not fish farms, olives, grapes etc...) has its place in a portfolio (but only a small part <10%, probably closer to 5%), it offers diversification hence reducing risk, it's environmentally friendly (most Agri will split any potential future carbon credits with you 50/50), the after tax returns aren't too bad when you factor back in the initial tax deduction. Risks like fire and flood can be eliminated by taking up the insurance options.

    I’d recommend trees as an investment, provided it suits your needs, i.e. as a once-off tax deduction or as part of a larger investment portfolio. It certainly wouldn’t be the first thing I recommend but once you have established an appropriate investment strategy, agri-business can certainly be added to it.
     
  5. Paul C

    Paul C Member

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    Brisbane
    I just noted this older post and had a quick read,.

    In the original post the writer says she had just been advised to "invest" $30k in agri product in Timbercorp... 3 or so months before the company is basically broke....

    It makes me wonder on the quality of "advice" out in the market place... really might just go and ask the neighbour down the road ... and at least keep the commission,,,:confused:

    cheers

    p.
     
  6. rosewaterwrx

    rosewaterwrx Member

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    Thanks for the replies.

    I'm actually a guy Paul haha.

    I should clarify, initially I was advised to purchase $30,000 with Timberlot and wound up purchasing $3000 with Great Souther (which may well be a mistake, albeit a much less expensive one than $30,000)

    My advisor also told me to purchase $50,000 in shares, this was when the ASX was around 6500.

    I only went with the $3000 with Great Southern thank God, but am seriously considering easing into shares with a $10,000 investment via a managed fund and then look at a further $10,000 in 6 months depending on how the land lays.
     
  7. rosewaterwrx

    rosewaterwrx Member

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    Well I guess Great Southern wasn't the best idea either :(, there fgoes $3,000 down the drain.

    Does anyone have any idea what exactly happens to the plantation I've invested in??
     
  8. TROM

    TROM Active Member

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    I like great southern - nice trees and views... but no money to be seen anywhere!:D
     
  9. rosewaterwrx

    rosewaterwrx Member

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    I could be wrong but im pretty sure you are taking credit for someone elses joke :)
     
  10. Superman

    Superman Well-Known Member

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    6th Nov, 2007
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    Location:
    Gold Coast, QLD
    PIS has halted all Agribusiness investments

    Below is a message from Professional Investment Services regarding future Agri-business investments. This means no PIS advisers will be advising to investment in Agri this year.



    Agribusiness MIS investments On Hold until further notice

    We know that to some this will be a great disappointment, but due to the uncertainty in the agribusiness industry and concern for future government support we are placing all agribusiness MIS investments on hold until we can get comfort that the industry has a future.

    We apologise if this causes an inconvenience. In the interests of investors however, we feel it is prudent to take this measure for the time being.

    To remove doubt, we would like to clarify that we believe that the industry has strong foundations and is an important part of a continuing strong agricultural industry in Australia for job creation and the environment. These are just two of the key components that underpin the role and benefits of these investments.

    We firmly believe the industry will rally around the current turmoil and do everything it can to protect investor’s interests. We thank our partners for their continued support and we will do everything in our power to resolve this uncertainty.

    We will continue to keep you updated on a weekly basis.

    Grahame Evans
    Managing Director

    Professional Investment Services Pty Ltd
     
  11. C3PO

    C3PO Well-Known Member

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    Adelaide, SA
    I believe ABC's TV programme Landline is broadcasting a report on Sunday which I would recommend strongly that you watch before making any investment decision in this area.