Alternative Asset

What is an 'Alternative Asset'

An alternative asset is any non-traditional asset with potential economic value that would not be found in a standard investment portfolio. Due to the unconventional nature of alternative assets, valuation of some of these assets can be difficult.

BREAKING DOWN 'Alternative Asset'

For most people, examples of alternative assets would include art and antiques, precious metals, fine wines, rare stamps and coins, and sports cards and other collectibles. However, there are also more traditional alternative assets including hedge funds, venture capital-related projects and infrastructure. In either case, alternative assets tend to be less liquid than traditional investments. Thus, investors who favor alternative assets may have to consider a longer investment horizon.

RELATED TERMS
  1. Alternative Investment

    An investment that is not one of the three traditional asset ...
  2. Asset Valuation

    A method of assessing the worth of a company, real property, ...
  3. Permanent Current Asset

    The minimum amount of current assets a company needs to continue ...
  4. Real Asset

    Physical or tangible assets that have value, due to their substance ...
  5. Asset Condition Assessment

    A report outlining how an organization can manage capital assets ...
  6. Non-Operating Asset

    Classes of assets that are not essential to the ongoing operations ...
Related Articles
  1. Investing Basics

    Understanding Alternative Investments

    An alternative investment is one that’s not among the three traditional asset types – stocks, bonds or cash.
  2. Financial Advisors

    The Pros & Cons of Alternative Investments

    Alternative investments are becoming popular investment vehicles for individual investors. Here are the pros and cons of adding them to your portfolio.
  3. Investing Basics

    Diversify with These Four Alternative Assets

    In times of market volatility, investors add alternative assets to their portfolios--highly illiquid, but profitable investments like art, land or precious metals.
  4. Products and Investments

    When Do Alternatives Add Value to a Portfolio?

    Alternative investments continue to grow in popularity. But when do they really add value to a client's portfolio?
  5. Options & Futures

    Alternative Assets For Average Investors

    These investments can add a new level of diversification to your portfolio.
  6. Financial Advisors

    Are Alternatives Right for Your Portfolio?

    Alternative investments are increasingly making their way into retail investors' portfolios. Are they a good fit?
  7. Mutual Funds & ETFs

    Alternative Investments: How The Game Has Changed for Retail Investors

    Learn how retail investors are using liquid alternative investments to diversify their portfolios. These funds are not correlated with stocks and bonds.
  8. Fundamental Analysis

    Managing Market Volatility with Alternative Investments

    Managing the effect of market volatility on portfolios has become the primary concern for the sophisticated global investor.
  9. Investing Basics

    Retirement Portfolios: Adding Crucial Alternatives

    Diversifying assets in a retirement portfolio means not putting all of your eggs into one basket.
  10. Financial Advisors

    Are Alternative Mutual Funds, ETFs Right for You? (MORN)

    Alternative mutual fund and ETFs are gaining popularity but are they a good idea for your regular Joe investor?
RELATED FAQS
  1. Are stocks real assets?

    Learn why stocks are classified as financial assets, not real assets. Understand the properties that determine whether an ... Read Answer >>
  2. Are current assets liquid or capital?

    Take a deeper look at liquid current assets for businesses and individuals, and learn how they differ from other types of ... Read Answer >>
  3. What is the difference between current assets and fixed assets?

    Learn what current assets and fixed assets are, examples of current and non-current assets, and the differences between these ... Read Answer >>
  4. What is the impact of inflation on liquid assets?

    Find out why inflation is particularly problematic for liquid assets, and learn what holders of liquid assets can do when ... Read Answer >>
  5. What is the difference between fixed assets and current assets?

    Learn the differences between fixed assets such as land and current assets such as cash, as well as how these types of assets ... Read Answer >>
  6. What is the difference between a fixed asset and a current asset?

    Discover the difference between fixed assets and current assets and the value of each to a company. Learn the category and ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center