Timberland is not a homogenous commodity. Forest stands must be selected with the same deliberation that stock portfolio managers choose sectors and individual companies, and timberland portfolios must be carefully managed to optimize all three return components: biological growth, timber product prices and land value.

Unlike stocks, there is a distinctive, proven yardstick for determining if a particular stand of trees is appropriate for an investor – the age of the forest. Three distinctive stages of growth provide three distinctly different sets of investment characteristics:

Emerging Growth forests (up to 15 years old) produce pulpwood for papermaking, a high-demand, low-price product with low to moderate price volatility. Because liquidity is limited during these years, timberland prices typically are discounted.

Established Growth forests (15 to 25 years old) produce chip-n-saw timber for pulpwood and small-dimension lumber. These products bring higher prices, subject to moderate volatility in lumber prices. Relative liquidity increases.

Mature Growth forests (over 25 years old) produce sawtimber used for large-dimension lumber and plywood. These forests feature higher product prices and higher price volatility. Liquidity is excellent.