Timber a Solid Investment
Commodity investing has gained favor over the last few years, but what sectors have proven the most profitable? According to Jared Cummans, a senior analyst with investment publication CommodityHQ, timber is well worth today’s investor’s while. Cummans writes:
“At first, timber may seem like an unorthodox idea. … In fact, timber’s performance has been very strong throughout its history.”
He adds that the price of timber has increased by an average of 5 percent over the last century, with particularly strong performances during tough economic times. Timber has also outpaced the S&P 500 since the beginning of the twentieth century, increasing by a strong 15 percent yearly since 1987. Strong international demand, he says, gives this commodity particular punch.
Cummans suggests several popular ways to play in the timber market. These include random length lumber and softwood pulp in addition to firms such as the Weyerhaeuser Co., Plum Creek Timber Co., and Deltic Timber Corp. Also noted are the S&P Global Timber & Forestry Index Fund, which have approximately 35 holdings, as well as the Guggenheim Timber ETF, which has more than 25 total holdings and $116 million in assets.
If you’re interested in integrating Timber into your portfolio or want to learn more about commodities in general, drop us a line or give us a buzz in the office.