Alternative Investments

Alternative investments can help supplement stocks and bonds to diversify your portfolio and potentially hedge against losses or boost returns.

Frequently Asked Questions
  • What investments are alternative investments?

    Alternative investment is a catch-all term that encompasses all investments except stocks; bonds; or cash (or a mutual fund or ETF that holds one of those three). Examples include derivatives, hedge funds, commodities, and private equity, but there are many more.

  • Is real estate an alternative investment?

    It depends on how you invest in the real estate. If you hold shares in a publicly traded real estate investment trusts (REITs), then it is not, as REITs are like stocks from an investment perspective. However if you hold real estate directly by yourself or through another type of real estate partnership then it is an alternative investment.

  • Is cryptocurrency an alternative investment?

    Yes, cryptocurrency is an alternative investment.

  • Why are alternative investments risky?

    Alternative investments tend to be risky for a few main reasons: they are complex, there is often little publicly available information about them so you have less ability to make informed decisions, and they can be more volatile.

Key Terms
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Disruptive Technology: Definition, Example, and How to Invest
Take the next steps to your goals. Business development concept
Warrants: A Risky but High-Return Investment Tool
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Master Limited Partnership (MLP)
Profit Margins for the Food and Beverage Sector
Asset-Backed (ABS) vs. Mortgage-Backed Securities (MBS): What’s the Difference?
Artificial Intelligence
Artificial Intelligence: What It Is and How It Is Used
Investor Checking Performance of Financial Portfolio Online Whilst Reviewing Investment Statement
Bespoke CDO: Definition, Uses, Vs. Bespoke Tranche Opportunity
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Systematic Investment Plan (SIP): Definition and Example
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Key Financial Ratios for Restaurant Companies
Offshore Investing: Pros and Cons
Collateralized Debt Obligation Squared (CDO-Squared)
Collateralized Debt Obligation Squared (CDO-Squared)
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Rejecting the Tender Offer of a Newly Private Company
What's the difference between exchange traded funds (ETFs) and closed-end funds?
Private Public Concept
PIPE Deal: Definition, How It Works With Stocks, History
Business and finance, stock market investment concept.
Swap Execution Facility (SEF): Definition, Goal and How It Works
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Why Banks Securitize Debts
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Timberland Investment
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Exchange Traded Notes: An Alternative to ETFs
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Packaged Retail Investment and Insurance-Based Products (PRIIPs)
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Variable Rate Demand Note: Explaining VRDNs
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Certificate of Participation (COP): Definition, Uses, Taxation
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How Collectibles Are Taxed
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Gross Acres
What You Need to Know About Investing in Movies
Securities-Based Lending: Advantages, Risks and Examples
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Bowie Bond: Definition, How It Worked, History
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Fine Art Can Be a Fine Investment
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Equity-Linked Security (ELKS)
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Crowdfunding for Non-Accredited Investors
Swiss Franc's
Is The Swiss Franc A Good Investment?
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The Four Rs of Investing in Retail
Investor analyzing stock market investments with financial dashboard on smartphone and computer screens
Exchange-Traded Derivative: Definition, Examples, Vs. OTC
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Permanent Capital Vehicle (PCV)
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Is There a Buy-and-Hold Strategy in Forex?
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What Are Dark Pools? How They Work, Critiques, and Examples
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Synthetic CDO: Definition, How It Works in Finance, and Example
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Energy Return on Investment (EROI)
How Serial Entrepreneurs Are Reshaping Wealth Creation
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Broad Index Secured Trust Offering (BISTRO)
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Index Amortizing Note (IAN)
Preferred Redeemable Increased Dividend Equity Security (PRIDES)
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Hong Kong Monetary Authority Investment Portfolio (HKMA)
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Advance-Deposit Wagering (ADW)
Contemplating Collectible Investments
Soccer Match
The Pros and Cons of Investing in a Sports Franchise
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Unitized Endowment Pool (UEP)
What Are Non-Traded Business Development Companies (BDCs)?
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Pool Factor
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Nonfinancial Asset: Definition, How It's Valued, and Examples
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Investing in Fine Wine
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Toxic Assets
Personal Loans
The Pros and Cons of Alternative Investments
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What Are Short-Term Investment Options?
The Basics of the CAIA for Alternative Investments
What Is Homemade Leverage and How Does It Work?
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The Most Typical Holding in a Special Purpose Vehicle
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Weighted Average Maturity (WAM) Definition and Calculation
Shenzhen SEZ, China
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