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Any ideas?
Old 08-16-2004, 09:56 AM   #1
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Any ideas?

I am beginning to accumulate cash from the sale of appreciated stock positions (MINI and PRV, lately), and I am somewhat at a loss as to where to put it to work. I was hoping for some suggestions/ideas.

First, a bit of background. I am probably 15 years from FIRE and in aggressive accumulation mode. Virtually all new savings is going into a model index portfolio, but I actively manage (with very few trades) the majority of my assets. I have a substantial tolerance for risk, so volatility is not much of a concern. However, I have enough exposure to the indexes and the general state of the US economy that I don't really want more. This is mostly after-tax money, so any investment should be tax efficient.

So what are good possible investmenst or asset classes that might not be too correlated with the US economy? Bonds are pretty much out due to tax-inefficiency. Commodities, perhaps (such as through PCRDX)? Maybe timber (PCL)? Real estae isn't too attractive at this point, and I already have lots of exposure through homeownership. Foreign equities? Something else I am overlooking? Perhaps a stock that is not highly correlated with the overall market/economy?
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Re: Any ideas?
Old 08-16-2004, 04:05 PM   #2
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Re: Any ideas?

As a background I'm almost completely invested in indexes with just a smattering of left over stocks that I should really clean up and some ESPP stock that will get sold when the tax holding period is over. I am diversified outside of the US with the EAFE and emerging markets. I'm looking to add some international value over the next few years too.

That out of the way what am I considering? I do like the idea of commodities and I have been thinking about timber. There appear to be a number of different direct and indirect partnerships available. The two most common seem to be Central American teak partnerships and New Zealand pine. Some of these seem legitimate and some have me hearing "Danger, Danger Will Robinson".

The return period for this type of investment is about 20-30 years. Some have no return until the harvest and some (generally the teak investments) provide some return on the way from the sale of not fully mature trees that were culled. There appear to be no taxes due on any of this until you actually realize income from the sale of the timber.

Which if any of these is worth investing in? I don't know, yet. I'm looking into it but I'm not planning to invest in it if at all until this time next year. The big question is am I able to tell which is legitimate and which is not? Particularly at a distance? This issue alone pushes me more to consider the New Zealand timber investments if any.

Some links to get started:
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Re: Any ideas?
Old 08-16-2004, 04:56 PM   #3
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Re: Any ideas?

Quote:
I am also considering investing in New Zealand. In the tourism business - as in me the tourist
<snip>
Absolutely Gorgeous!
It does indeed look gorgeous. Was the fish delicious or did you release it? Is that you on the left, the right, or the middle?

I want to go to New Zealand but no time until after retirement. (3 big trips planned before retirement: Italy this year; France by canal boat and a side trip to visit relatives in Scotland in 2 years; Thailand->Malaysia->Singapore by train in 4 years). I had a Kiwi friend in grad school and I've heard a lot of good things about the country.
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Re: Any ideas?
Old 08-16-2004, 05:03 PM   #4
 
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Re: Any ideas?

Quote:
It does indeed look gorgeous. Was the fish delicious or did you release it? Is that you on the left, the right, or the middle?
The fish was released.

I'm the one in the red sweater. The guide is holding the fish.
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Re: Any ideas?
Old 08-17-2004, 12:12 AM   #5
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Re: Any ideas?

Hyper,i assume your looking for non US $ denominated investments.If im wrong than perhaps look at RYN,118,000 acres in NZ,not quite the same bragging rights,but easy to keep tabs on.-ak4195
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Re: Any ideas?
Old 08-17-2004, 08:27 AM   #6
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Re: Any ideas?

Yeah, I've thought about the companies that own lots of timberland as a possibility but there are some downsides. They aren't in most cases a pure commodity play - they have some milling or other activity as well. The yield on some such RYN doesn't seem to be that high for something that should be generating a lot of cash (no significant analysis - mostly just gut feeling). The timber partnerships will throw off no income until I'm no longer a US resident and then no longer subject to US taxes.

There are other choices similar to RYN and this is a half-decent summary of them:
http://www.smartmoney.com/sturmscree...20011016screen
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