Harvard University has some of the best money-management brains in the country running its massive endowment. So when Harvard puts 12% of its cash into timber, it’s time to pay attention.
Timber investors have quietly beaten inflation and the S&P 500 over the past century.
As global population pressures mount, demand for wood, pulp and paper is soaring. China has a nearly insatiable need for lumber for housing. Supply is tight and can’t be increased easily.
Considering its track record, it’s puzzling that wood doesn’t get more attention from Wall Street. Timber has outperformed the S&P 500 since 1910… and is the only asset class that has risen in three out of the four major market collapses of the 20th century.
If you’re worried about inflation, look no further. Timber prices have beaten inflation by +3.3% a year over the last century. During the raging inflation of 1973-1981, timber rose +22% a year, well ahead of traditional inflation hedges like property and commodities.
Timber will almost certainly be a safer place for your money than stocks over the next decade. Trees don’t worry about interest rates or budget deficits. They just keep growing exponentially faster every year. And the beauty of owning timber is that it can be harvested at any time. If prices are low, you just let your trees mature further until prices rise. In the meantime, your trees just get more valuable.
Check out Plum Creek Timber: PCL