Overview of Timberland Investing
Over the last twenty years, timberland has become recognized as an attractive investment opportunity. Institutional timberland investment has grown from only $1 billion in 1989 to more than $15 billion today. The track record of early investors — and a slew of recent academic research — indicates that timberland is a near-perfect asset class. Returns from managed timberland investments have been competitive with other assets regardless of the time period considered. Studies show that a diversified timber portfolio would have returned 13.3% annually over the past 40 years, compared with 11.6% for the S&P 500. Impressive, but that's just the beginning. Timberland is also remarkably low-risk, with volatility more like bonds than stocks, and bears a negative correlation to both stocks and bonds.