Abstract
Investors who are interested in long-term investments have regarded timberland as an advantageous asset class. The formation of timber real estate investment trusts (REITs) has offered both individual and institutional investors more options to diversify their portfolios through securitized timberlands. Nevertheless, different mixes of REIT stocks will yield various degrees of volatility for the portfolio's performances. The cointegration analyses in this study show that there are no general trends among the historical timber REIT stock prices and the S&P 500 index. Therefore, there is diversification potential in the long run with each timber REIT (except Plum Creek) considered as a unique candidate.
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