Other than oil and natural gas, guess what is the most widely owned commodity by the wealthy? As the headline gives away, it is timber.
Among households with over $2.5 million in investments excluding their primary residences, the average allocation to timber is almost 8%. Although timber does seem to be something of an all-or-nothing investment selection. A slight majority–about 62%–own no timberland rights at all. But of those that do, the average allocation to timber investments in their portfolio is almost 17%.
The appeal is that timberland is seen as a steady investment that can churn out cash flows during difficult economic conditions and are diversifiers from stocks, bonds, and whatever their core economic engine is.
In addition to the steadiness of returns, the wealthy also like the tangibility of a timberland investment. You can visit the land yourself and actually see the trees. You … Read the rest of this article!