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What You Should Know About Investing in Natural Resources There are various reasons why you may want to invest in natural resources. For example, the world natural resources have been depleting. This has led to an increase in prices of various resources over the years. Investing in a natural resource such as a forest can be profitable for the savvy investor. There are various type of natural resources that make good investments. 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 Here are some reasons why you should consider investing in some natural resources:
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i) Increased spending by developing economies The last few years have seen an increase in the incomes of developing countries. This has led to an increase in demand for natural resources such as precious metals and building materials. There is always the potential risk of supply shock when investing in natural resources like oil. 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 An increase in global development and repair of infrastructure also makes investing in natural resources profitable. Developing economies have huge demand for lumber, steel and gravel for construction of roads and other infrastructure. These countries are undergoing a construction boom mainly due to urbanization and an increase in population. Moreover, majority of these public infrastructure have to be updated on a regular basis. As more decades pass before these infrastructure are updated, the economies are likely to end up spending more on them. iii) Demand by countries To ensure consistent supply of important raw materials, some countries purchase natural resources. Sometimes, the buying can be done through political agreements or foreign acquisitions. Investing in natural resources is profitable partly due to the demand created by governments. iv) Store of value You can use various natural resources to store your wealth. The natural resources are excellent stores of wealth since they are usually not subjected to fluctuations in the market. Among the natural resources you can use to store wealth are precious metals. The prices of precious metals remain fairly stable, unlike is the case with stocks that are usually erratic depending on market forces. In the long run, the metals are better store of wealth than stocks. Before getting into investing in natural resources, it is advisable to know how they work. You can also hire an investment manager to guide you in investing in the resources. An experienced investment manager will advise you on the right investment option to go for that will bring the returns you want.

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