Natural resources investments typically include investments in resource-based companies or funds that invest in natural resource assets.
Key-Takeaway
- Natural resources investments can provide attractive returns and serve as a portfolio diversifier.
- Supply and demand dynamics and environmental and regulatory factors often influence natural resources investments.
- Natural resources investments can be exposed to various risks, including commodity price volatility, operational risks, and geopolitical risks.
Tips
- Conduct thorough due diligence and analysis before investing in a natural resources project or fund.
- Evaluate the track record and experience of the project sponsor or fund manager in developing and managing natural resources investments.
- Consider the regulatory and policy environment of the jurisdiction where the project or fund is located.
Advice
- Natural resources investments can be complex and involve various risks, including operational, financial, and environmental risks.
- Be prepared to hold onto your investment for the long term as many natural resources investments have a long payback period.
- Monitor the progress of the project or fund and be prepared to adjust your investment strategy if necessary.
Conclusion
Natural resources investments can provide attractive returns and serve as diversifiers in a portfolio. However, investing in natural resources requires significant due diligence and analysis to identify promising opportunities and manage risks effectively. As with any investment strategy, it is important to work with a financial advisor who can provide guidance and support.