Seeing The Profit From The Trees
By: Mark McLaughlin,
Special to CNBC.com
Sometimes, money does grow on trees—at least, if you're an investor in timberland.
From 1987 through 2007, timber delivered an average annual return of 15.8 percent— based on the performance of the NCREIF Timberland Index — compared to 11.5 percent for the S&P 500 while exposing investors to less risk.
Those returns were earned mostly by large institutions like insurance companies and university endowments that have poured more than $40 billion into timber investment management organizations, TIMOs, not open to most individual investors.
Today, anyone can be a timber investor.
The easiest way to participate in the growth of trees, sale of wood products and the appreciation of forest land is through a timber, real-estate investment trust. Timber REITs, which own and manage forest tracts and wood processing plants, trade publicly like stocks but must pay out 90 percent of their earnings to investors through dividends.
For more information on how you can invest effectively in land, contact Brad Adair at 205.966.1860.