Paint will work fine but as on any exterior surface, over time will begin to flake and will eventually need scraping and refinishing. Stain, however, is "breathable" and will not trap moisture, therefore - no blistering, no peeling. Stain really is the best choice here, there are many colors to choose from in semi-transparent and solid finish.
Western Red Cedar should be preservative treated if intended for use
in applications where it is dug into the ground. i.e. Fence Posts, Landscape Ties or Garden Arbor Posts.
CEDARS' SECRET... resistence to rot and decay.
MORE... on the attributes of cedar.
Amazing facts about TEAK WOOD.
Interesting information about All Things Cedar PATIO AND GARDEN FURNITURE