January's Woodlots Column: Invest in Timberlands - Discuss!

[EditorBob]

Below is an excerpt of January's column. Feel free to post comments and questions!

by Thom J. McEvoy

For those investors who made a conscious decision to buy forestland, witness the wisdom of that decision today. The stock market is falling with no bottom in sight, the auto industry in America is about to go belly-up and more than a quarter of homeowners with mortgages are in risk of default. The Internet bubble of last century has morphed into the real estate bubble of 2008, and signs point to even more serious and lasting economic troubles.

Following Black Tuesday in 1929, the market languished for three years before bottoming out in 1932. Guess how long it took to reach its precrash peak? The Dow Jones Industrial Index took 25 years--and a World War--to surpass its inflation-adjusted precrash peak in 1954. Few economists are willing to speculate on where the economy goes from here, nut if you own forestland, hang on to it no matter what. Timber prices may be a little soft for a while, but your money is safe in forests (and not necessarily buried in a tin can under your favorite tree).

Just how good are forest investments? It depends on a number of factors, such as: How much did the forestland cost, and what was the value of timber on the date of acquisition? How much has it cost to maintain the timber investment (property taxes are one of the big expenses in most states)? What is the investment period (in silvicultural terms; the ‘rotation’)? What is the time-value of money or the opportunity cost? And, finally, What are the markets like at the time of harvest?

Read the entire column at Farming: The Journal of Northeast Agriculture.

The author is a professor and extension forester with the Rubenstein School of Environment and Natural Resources at the University of Vermont.

[tractordvr49]

I really couldn't agree more to that statement! In the poor state of our nation we need something solid to fall back on; the land. Presently I work as a crane operator in the building material business. We were named DEALER OF THE YEAR in 2008 in "ProSales" magazine and to say im might proud to be in that company, especially when others are going under. My part in the company is Comercial Roofing, going to be lots of work in this sector this year but. . . this means our woodlands are being "raped" if you will, by mall builders and such building buildings which are way overpriced, and will probably be occupied for mere month then become vacant. (Just to clear the record I'm very glad to be working but I do not agree with all the building that is going on) We cannot fight big business per say but . . .it we buy woodlands, old farms ect then we can preserve our heritage a while longer. There are numerous people that might have no idea how valuable these properties are to us. I realize taxes are eating us alive but we must hold on, somehow. If not there will be no woodlands, no country, no wild animals, no place where the stars come out at night, no place for trees,which helps make the air we breathe, and with out these things no you or me. . Maybe that doesn't bother you, but it sure does me..Think deeply about it. . .John

[LakeviewEnterprises]

Imagine you purchased twenty acres and planted it in nothing but walnut. Walnut can break under the weight of the nut and still be highly disease and insect resistant so theres not much going to affect it for the worse. You and i would probably not live to see it but your great grandchild would certainly be financially secure.