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What You Should Know About Investing in Natural Resources There are a number of reasons why investing in natural resources is something you should consider. For instance, there has been a decrease in the world’s natural resources. This has led to an increase in prices of various resources over the years. If you invest in a personal forest, you can end up reaping huge benefits in future through sale of lumber. There are different natural resources that you can invest in. Gold, coal and lumber make it on the list of the most profitable natural resources for investment. Before investing in any natural resource, it is important to find out its benefits and downsides. Four Benefits of Investing in Natural Resources Below are some reasons why it makes sense to invest in natural resources:
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i) Increase in income of developing countries The last decade has seen many developing countries experience an increased in disposable income. As a result, the demand for building materials, precious metals and other natural resources has also been increasing. Natural resources are also prone to supply shock, like is the case with any investment. However, in the long term, investors reap huge benefits since the prices of these resources usually rises.
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ii) More infrastructure demand Investing in natural resources is also made profitable due to an increase in infrastructure development around the world. In the developing economies, there is a huge demand for steel, lumber, gravel and other materials required for construction of roads and other public works. Urbanization and an increase in population are among the reasons leading to the infrastructure boom in most developing countries. Moreover, majority of these public infrastructure have to be updated on a regular basis. Countries are likely to spend more on the natural resources need for construction of public works and infrastructure when they go for decades without upgrading them. iii) Purchase by countries There are various countries that purchase natural supplies to ensure consistent supply of important raw materials. The buying may be done through foreign acquisitions or political agreements. The demand created by governments is partly responsible for the profits investors of natural resources are getting. iv) Maintain your value Some natural resources act as a store of value. This is because they are not subject to general market fluctuations in the economy. Precious metals are good examples of these natural resources. Unlike stocks that can be erratic depending on the happening in the country, precious metals maintain a fairly stable price. In the long run, the metals are better store of wealth than stocks. If you wish to invest in natural resources, it is important to educate yourself on the options available. You can also hire an investment manager to guide you in investing in the resources. The manager can point you in the right direction with regards on how to get started and set up your investment portfolio for the best benefit.

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