What risks are involved in timberland investing?
A. The risks associated with timberland investments can be classified into two major categories: physical risks and economic risks. Physical risks include natural disasters, pest infestation, disease, animal damage, and theft. Economic risks include price risk, supply risk, regulatory risk, demand risk, and liquidity risk. With proactive timberland and portfolio management, most risk factors can be minimized dramatically. See further explanation of risk factors in Timberland as an Investment – Timber Primer – Risks and Risk Management.
