PORTFOLIO DIVERSIFICATION

Timberland investments offer investors high cash flow, strong real returns, and low risk relative to returns. In addition to these fundamental investment attributes, timberland also offers attributes specific to the asset class such as biological growth and the ability to warehouse the asset and time harvests to market conditions without suffering potential impairment (write-down) due to technological or market obsolescence like other inventoried tangible assets.

When evaluating the portfolio mix, institutional investors need to assess the interaction of risk and return when including timberland in a portfolio of more traditional type investments. Also, institutional investors should assess whether including timberland in a portfolio would be expected to increase returns and/or lower risk compared to a portfolio without timberland.