Timber for the long haul

[AlmoPa]

Given that the second word in the title of these forums is Traders as opposed to Investors it is not surprising much of what is posted here are short run ideas including day trades, swing trades, and momentum plays.

For those of you with a longer-term investment horizon you may want to consider adding exposure to timber to your portfolio for inflation protection and real growth at about the long-run pace of the global economy. Some of the greatest investors in the business are the former and current managers of Harvard & Yale's endowments - Meyer and Swenson respectively. Here is an excerpt from Yale's 2006 report. Note the endowment has over a quarter of its investments in real assets and one of the largest allocations to timberland in the industry (and the top annual performance over the last 20 years to boot).

[Anya789123#gennik]

imber is pulling back after becoming extremely overbought in the short run. Look for retracements that coincide with an RSI(14) that bounces off the 40 to 45 level for an entry if you're considering this asset class. Outside of gold timberland may be the best inflation hedge available. It also has the benefit of spinning off cash flow which is not a characteristic gold can claim.

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If you prefer the diversification/spreading of risk of the two ETFs mentioned above over the selection of individual stocks note that iShares WOOD is the cheaper of the two with an annual expense ratio of 0.48% while Guggenheim's CUT comes in at 0.70%. Neither are particularly liquid with three month trailing volume averaging ~15,000 shares traded daily for WOOD and 50,000 shares traded daily for CUT. It appears whatever extra expense paid annually to CUT could theoretically be made up in narrower bid-ask spreads but again I'm not suggesting timber is a quick trade but rather a multi-year holding in a portfolio.

[Angewygom]

Conforming to some semblance of a channel and flagging after a short-term overbought reading timber ETFs look like they could rebound at these levels.