If you are like most investors, you've probably never made an investment in precious timber. In fact, 8 out of 10 investors have never heard of timber as an asset class. If you're one of those investors, then you have been missing out on what experts call the only low-risk, high-return asset class!

Precious Timber has consistently averaged mid-teen returns. It has none of the volatility or crash risk of the stock market or real estate, and it has handily beaten precious metals as the ideal hedge against inflation.

In early January 2013, Investment U Senior Analyst, Carl Delfeld wrote a brief post entitled, 'Sell Gold, Buy Timber.' Delfeld said, "No question, gold has had a nice run. It's been up 12 consecutive years. And during this period gold prices are up around 500%. This is probably why in 2012, 84% of new cash invested in commodities went into gold funds. But these investors would have done far better if they had invested in another commodity that we use every day. One that beat gold by 567% in 2012."

That year, gold was up 6.6%. Timber on the other hand was up a whopping 37.4%. Now we all know gold has witnessed a tremendous bull market since the early 2000's, and there are many compelling reasons for this. However, if you have been tracking the price of gold closely, you know that it reached a high of $1,900+ an ounce in 2011 and has since witnessed a fall of more than 32% (as of this writing).

If you're still watching or holding gold, you know there are just as many reasons offered still, both for and against the precious metal, as a core component to a balanced portfolio. The bulls cite as many compelling reasons to own as the bears do to sell. Whether you agree or not on the merits of the metal as an investment vehicle, most astute individuals understand that gold still represents the basic true measure of intrinsic value. Most of us think of gold as the truest real value of money, and a physical and tangible store of value.

But what is money?

In simple terms money is a medium of exchange. But if we look back over many centuries we will find that numerous things have been utilized for the purpose of exchange. Chickens, salt, cows, even cigarettes have been used. The most common, of course, has been paper.

In an interview with Stansberry & Associates, Doug Casey, one of the world's best-known experts on gold and resource investing said, "Gold is ideally suited because it possesses all five characteristics of good money that Aristotle pointed out back in the fourth-century B.C."

Casey explained…"First, it's durable. Money needs to be durable for obvious reasons. It needs to last and not disintegrate in your pocket or in a bank vault. Second, gold is divisible. Good money must be divisible to pay for items of different value. Third, it's convenient, which is why other elements like copper or lead aren't good money... it takes too much of them to be of value. Fourth, gold is consistent. This is why you can't use real estate as money. Finally, and perhaps most importantly, gold has value in and of itself. Paper has next to no intrinsic value of its own, which is why paper is such terrible money."

Gold then, is certainly the best instrument for money – but as for the best creator and preserver of real wealth, precious metals have performed very poorly when compared to precious timber.

Precious Timber has quietly been one of the top investment choices of the ultra-wealthy, and there are five main reasons they hold precious timber as a core component of their portfolios.

Reason #1: They make consistent profits—with returns averaging 15% a year! Timberland is the BIG secret the wealthy have kept to stay wealthy. It is without a doubt the best-performing asset class of the past 100 years. Timber has enjoyed average mid-teen returns without the gut wrenching volatility of the stock market and dangers of the bond market. By contrast, the S&P has returned just 11% a year. On a $50,000 investment, that's a difference of $1,138,847.

Reason #2: They love the safe, no-worry aspect of timber. Stock investing is dangerous. It's volatile. It's very unpredictable. It's not what you want for the safe side of financial planning. Instead of worrying about the next downturn in the stock market, precious timber owners relax and watch the value of their timber grow and grow—regardless of the economy or equity markets.

Reason #3: Rising demand practically assures the double-digit returns will continue. Over the past 40 years, global demand for precious hardwood has multiplied 25 times. And with the world's population expected to rise by as much as 54% by 2050, continued demand is almost certain to multiply. This rising demand is one of the reasons why billionaire investor Jeremy Grantham is bullish on timber. Grantham says, "Timber is the best long-term investment there is. It is the only low-risk, high-return asset."

Reason #4: Unbeatable diversification for their portfolios. Precious Timber provides the wealthy with a great way to provide balance and diversification to their portfolio, simply because it continues to rise even when stocks and other investments are falling. In the technical terminology favored by professional investors, timber sports a low correlation with most asset classes of less than +0.1. So adding timber to your portfolio enhances the potential for return while reducing your risk at the same time.

Reason #5: Never losing money is more important than making money. The wealthy know how difficult it is to make up losses—so they strive hard to never lose money by focusing on long-term investments that don't include the risks of stocks, bonds, and the historically low returns of precious metals over long periods of time.

If you buy an ounce of gold today it will still be an ounce of gold ten years from now and twenty years from now. The future value of that gold will depend on many factors. With precious timber, however, if you plant rare and exotic saplings today, in as little as 15+/- years from now those same trees will have grown in volume and value exponentially. Using the Doyle scale rule, if that sapling grew to 40 feet long and 16 inches in diameter, the estimated volume of lumber would be 360 board feet. One ounce of gold can never grow to reach 360 ounces. Owning precious timber therefore, will more than likely continue to out-perform precious metals over the long-term.

An allocation of precious timber in addition to precious metals is something every diversified investor should consider.