That’s one of the conclusions from this report that ran online at Forbes.com a few weeks ago titled Cut Down Portfolio Risk With Timber. I had fully expected the author, Robert Stammers, to be a shill for an organization tied to the timber industry. Turns out I was wrong. He’s a CFA, a quant, who specializes in providing strategic planning and analysis for business owners and private investors. What does he have to say about investing in timber? It’s quite simple.
Timber returns have beaten stocks.
Measuring returns using the National Council of Real Estate Investment Fiduciaries (NCREIF) Timberland Index (TBL), timber investment returns exceeded those of the S&P 500 from 1990 through 2007. In that period of time, the NCREIF Timberland Index annual compounded return was 12.88 percent versus 10.54 percent for the S&P 500 index.
Editor’s Note: The market meltdown of 2008 is not factored in to these numbers. I can only imagine what ratio will emerge when more recent figures are included.
At The Land Report we’ve stressed utilizing timber to diversify your portfolio since day one. Each issue of the magazine features numerous ads from well-established brokerages and consultants specializing in timberland. Online we regularly feature foresters at Ask the Expert. And we’ve even gone so far as to highlight other ways to invest in timber, including equities.