Additonal Advantages to Diversification and Risk Reduction

Timberland is a sustainable resource investment. It’s not a constantly depleting investment like a gold mine or an oil well. The biological growth element, along with the ability to store the asset on the stump, provides an excellent means of capital preservation unique to timberland investing. Historically, timberland has provided returns that are competitive with other major asset classes with lower return volatility, therefore offering high risk-adjusted returns relative to other asset categories. Because timberland has a low correlation with other assets, it also provides additional diversification and risk reduction to otherwise well diversified portfolios.

Primary advantages to adding timberland to a portfolio:

  • High risk-adjusted returns
  • Natural inflation hedge
  • Low correlation with most other asset classes
  • Downside protection – biological growth element reduces risk