How does an investor best diversify their timberland investment portfolio?
A. The addition of timberland, by itself (even in a single investment), provides positive diversification benefits to an investor’s portfolio. As an investor builds their timberland portfolio (utilizing an opportunistic approach), over time, a diverse portfolio of timberlands of varying age classes, species, locations, regions, and country locations can be achieved. Timberland is generally a niche investment and therefore the investor should focus on the region that offers the most favorable value and opportunity and not focus on diversification of the timberland portfolio simply to “diversify”.
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