Natural ResourcesLocked: included in All Access

Natural resources as an asset class: how raw land, farmland and timberland resemble and differ from real estate and from each other, how commodities are held (mostly through derivatives) and priced against the spot market through carry costs and convenience yield, and what drives their risk, return, inflation-hedging ability and diversification benefits in a portfolio of stocks and bonds.

1. 1. Raw land, farmland and timberlandRaw land, farmland and timberland are unique, illiquid, location-bound assets like real estate, but their value comes from the land and what grows on or lies under it, not from buildings, and only farmland and timberland add an income stream to price appreciation.Locked: included in All Access12 min
2. 2. Investing in farmland and timberlandFarmland and timberland earn from selling their output, from output price changes and from land value changes, but timber can be stored on the stump while crops must be picked when ripe, and both carry weather and climate risk that can be partly hedged and partly managed.Locked: included in All Access14 min
3. 3. Commodities: features and ways to investCommodities pay no cash flows and cost money to hold, so investors seek price gains, usually through futures and other derivatives rather than physical holdings, or through ETPs, CTAs and specialised funds.Locked: included in All Access13 min
4. 4. Commodity pricing: carry, convenience yield and curve shapeNo-arbitrage ties the forward price to the spot price: carry costs push the forward up and convenience yield pulls it down, so the curve is in contango when costs dominate and in backwardation when the benefit of holding the physical commodity dominates.Locked: included in All Access14 min
5. 5. Risk and return of natural resourcesCommodity prices are set second by second by supply that adjusts slowly and demand that moves with the global economy, giving high return potential with high volatility, while farmland and timberland are valued infrequently, look smooth on paper, and carry real weather, cash-flow, liquidity and global risks.Locked: included in All Access13 min
6. 6. Inflation hedging and diversificationCommodities are a strong inflation hedge because their prices feed directly into inflation, but they fall when inflation eases, while farmland and timberland show little link to inflation yet hold up across regimes; all three diversify a stock-and-bond portfolio thanks to low correlations.Locked: included in All Access13 min