I had a similar problem -- treated timber stair/railings on a new
house. Filled nail holes with latex caulk, and painted with latex
exterior semi-gloss enamel. Some shrinkage of the caulk, so gave it
another shot, and the second coat of paint. So far, so good, and one
year into this. Only problem is where I hit things with my string
trimmer when mowing the yard.