What is an example of an alternative investment?

An alternative investment is a financial asset that does not fit into the conventional equity/income/cash categories. Private equity or venture capital, hedge funds, real property, commodities, and tangible assets are all examples of alternative investments.

What are the three alternative investments?

But just like most things in life, not all alternative investments are created equally. We like the core, foundational alternatives: private equity, private real estate and private credit. Let’s explore each a little further. There is tremendous opportunity in private equity.

What is the best alternative investment?

List of Alternative Investments: The Top Seven

• Physical Real Estate. The most common alternative investment is investing in physical properties.
• Real Estate Crowdfunding.
• Fine Art.
• Peer-to-Peer Lending.
• Your Own Online Business.
• Commodities.
• Cryptocurrency.

Are alternative investments safe?

Risks of Alternative Investments Alternative investments are more complex than traditional investment vehicles. They often have higher fees associated with them. As with any investment, the potential for a higher return means higher risk.

Why are people investing in alternative investments?

Alternative investments typically have a low correlation to more traditional asset classes, as discussed. Alternative assets therefore provide an opportunity for portfolio diversification, reducing overall risk exposure across investments. Many alternative assets also provide a hedge against inflation.

Are alternative investments high risk?

How much should you invest in alternative investments?

A new study carried out by Dexia Asset Management shows the benefits of allocating 15\% to 20\% of a portfolio to alternative funds. Finding a good balance between risk and return is the first aim of any investment strategy.

How much should I invest in alternative investments?

Here’s how much financial advisors should invest in alternatives to make a difference. Liquid alternative investments, including mutual funds that use hedge fund strategies, aim to provide some added diversification and reduce volatility. You might need to allocate 10\% to 20\% to see an effect, experts say.