Some investors have diversified their investment holdings with timberland because in recent years timberland has tended to outperform stocks. But is buying and selling timberland always more profitable than buying and selling stocks? To help answer this question, I (RAH) examined the annualized returns for timberland and stocks from 1987 to 2007, using annualized returns of four holding periods (5, 10, 15 and 20 years) as the measure of performance.
Timberland values were measured using the NCREIF Timberland Index and stock values were the closing values of the S&P 500 for the last day of each year from 1987 to 2007. To learn how I computed the timberland index and annualized returns, see the companion spreadsheet.
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Timberland investment returns
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