The Race Continues: Economic Growth vs. An Economic Tantrum-Week 8

Factors that Make Timberland an Attractive Asset:

3. Timber is a Crop:

Even though it has an 18-35 year rotation for harvesting versus an annual harvest for a cash grain like corn or soybeans, managed properly timber has a good rate of return with a periodic income stream from thinnings and a final harvest. Unlike corn or soybeans this crop does not have to be harvested at a set time.

To maximize return, timberland should be thinned and harvested within a certain window of time. But that window is fairly broad. Thinnings could have a two to three year window with the final harvest having an even broader window.

This allows you to pick the best markets for your timber sales. Over our decades of being land brokers we have seen this increase the final return by as much as 25% in some cases. Timing is everything.

In these uncertain times, it is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.