Investing in Hedge Funds, Derivatives or PE Deals
Alternative investments are defined as investments that fall outside of the three traditional types of investments.
Historically, traditional types of investments are defined as cash, bonds and stocks.
An investment management firm may deal with certain complex financial investing instruments that are classified as alternative investments.
Investing in hedge funds, derivatives and private equity deals are examples of these types of investments.
Some alternative investments, like hedge funds, are only made available to people who have a very high net-worth. Others are much more accessible.
Even someone with a modest investment portfolio could diversify their holdings into certain alternative investments such as real estate or precious metals.
However, some alternative investments are riskier than their traditional counterparts, so any investments should only be made after consulting with your investment management professional.
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Alternative investments cover all other types of investments that don’t fit into the traditional investing categories (ash assets, bonds and stocks).
Of course, this means that this is a very broadly defined term.
Anything that involves physical assets, for example, would be considered an alternative investment.
This makes real estate one of the larger categories of alternative investments, although there are other options for physical asset investing.
Investing in cars, art or even fine wine is also considered alternative investing.
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