Forestry, an attractive and solid investment.

The forestry market has some attractive benefits, which makes it a unique, solid and sustainable investment. Read all about why investing in forestry could be attractive for you.

• Low Volatility

  Timber offers a level of price stability over the long-term that is more comparable to fixed income instruments than to equity instruments. The biological and investment growth cycles are steady and predictable. In low-price years, timber can be left standing until more desirable pricing is available. When timberland is combined in a diversified portfolio, returns tend to smooth over time, thereby reducing the overall portfolio's risk level.

  Diversification Benefits

  In addition to attractive risk-adjusted returns and low volatility, timberland investments enjoy low correlations with other asset classes. Combining timberland in a well diversified portfolio can lead to a more efficient portfolio (higher return, lower risk). There tends to be a positive correlation between timberland returns and inflation. This indicates to a certain extent that timberland investments provide a hedge against inflation.

  "Enhanced" returns

  The total return is enhanced by the biological growth of the timber as well as product class jumps.  With proper acquisition, active management and disposition, rates of return can be enhanced.

• Favorable supply and demand

  Historically, demand for wood products has tracked closely with worldwide population growth. World population is expected to increase 41% by the year 2050.

  Flexible harvesting

  Because a tree's life cycle does not require it to be harvested at any particular time, it can be left standing during poor price periods.

  Liquidity

  Although timberland investments are relatively illiquid, liquidity is normally achievable in a moderate period of time.

  Diversification

  As mentioned before, the investment performance of timberland has low equity correlation and extremely low fixed-income correlation. It also tends to has a positive correlation to inflation. Timberland holdings, as a result, offer investors a sort of hedge against market downturns and inflation.

  Environmental responsibility

  Timber is a renewable, natural resource that provides ecosystems with benefits such as clean air, clean water, wildlife habitat and carbon sequestration. Usage of timberland plantations ensures the preservation of natural forest lands for future generations.