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Alternative investments can be a way to add diversification to your portfolio if the assets have a low correlation with traditional investments like stocks and bonds, meaning they tend to move in ...
Alternative investments are sometimes used as a way of reducing overall investment risk through diversification. Some of the characteristics of alternative investments may include: Low correlation with traditional financial investments such as stocks and bonds [21] It may be difficult to determine the current market value of the asset
In finance, the notion of traditional investments refers to putting money into well-known assets (such as bonds, cash, real estate, and equity shares) with the expectation of capital appreciation, dividends, and interest earnings. Traditional investments are to be contrasted with alternative investments.
“Financial assets that don’t fit into the traditional categories, like stocks, bonds or cash, are referred to as alternative investments,” said Steven Kibbel, a CFP® and senior editor at ...
The best alternative investments are those that are well-matched to your finances. Seeking assistance from a financial advisor can help you understand which investments fit your goals best.
Many investment funds are composed of the two main asset classes, both of which are securities: equities (share capital) and fixed-income . However, some also hold cash and foreign currencies. Funds may also hold money market instruments and they may even refer to these as cash equivalents; however, that ignores the possibility of default ...