Forests as an investment

Consider our forests as investments, especially as trees grow into merchantable sizes. Merchantable trees represent a value that could be obtained by selling the tree. This return or value could then be used or invested in any number of ways, depending upon each landowner’s personal desires and needs. To manage our forests wisely, we must be able to compare these returns to other investments or businesses. Landowners need to know what their timber investment choices are and the return they are expecting to receive in order to make sound management choices.

Timber is a unique investment.

Time.  Generally, there is an extended investment period while the trees reach marketability.
Flexibility. Product classifications allow landowners to choose to liquidate the investment.
Opportunity.  There are sometimes over-looked recreation, hunting and other non-market opportunities associated with the investment.
Risk. There is a real risk in a complete and unexpected loss in the value of the investment due to fire or insect damage