Alternative or Alt investments have risen in popularity in recent years as the low-interest-rate environment and reduced volatility has driven yields down on traditional assets.
What are alternative investments?
Broadly speaking, an alternative investment is any investment that is not in traditional stocks, bonds or cash. There are a variety of different vehicles and instruments to invest in alternative assets classes and they each carry varying degrees of risk.
Some of the major categories of alternative investments are:
1. Commodities
2. Real Estate – by far the largest
3. Hedge Funds
4. Private Equity
Alternative investments provide an avenue to boost return and create diversity in the portfolio. In the case of Real Estate, it can also be one of the only vehicles for hedging against inflation.
