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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