Alternative Investments: How to Diversify Your Portfolio

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Alternative investments are a type of investment that is not a traditional asset class. Alternative investments include stocks, bonds, commodities, real estate and other types of investments that don’t have the same economic characteristics as stocks or bonds. According to¬†AG Morgan, alternative investments have been around for many years but gained popularity during the 2008 financial crisis when investors saw their portfolios drop significantly in value due to market volatility.

Alternative Investments

Alternative investments are not stocks or bonds. Alternative investments include real estate, hedge funds, private equity funds and derivatives such as futures contracts and options. They are more difficult to get into than traditional investments, but they can offer higher returns on investment. One downside of these alternative assets is that they’re more volatile than traditional assets — meaning your portfolio may lose value if you invest in them.

Types of alternative investments

Alternative investments are any type of investment that is not a traditional stock or bond. These include real estate, hedge funds and private equity.

Some of these investments have been around for decades; others have been developed more recently by financial experts looking for new ways to diversify portfolios and expand their risk management strategies.

Single-asset classes

Single-asset classes are a way to invest in a specific asset class. For example, you can buy shares of gold miners or the S&P 500. These investments have the same risk and return profile as their underlying market but with lower fees than mutual funds (because there’s no manager).

  • How do I invest?

Investors can buy and sell single-asset classes through their brokerage account or directly from the issuer. The latter option is often more expensive but may be worth it if you want to avoid commissions and take advantage of tax breaks like those offered by gold IRA accounts or REITs that allow for tax deferral on dividends until they’re paid out at retirement age

Asset allocation funds

Asset allocation funds, also called asset class funds, are a type of investment that combines multiple assets into one fund. You can purchase them through an investment advisor or on your own through the stock market. They’re designed to provide investors with steady returns over time by diversifying their portfolios across different types of investments so they don’t have too much risk in any one area.

They often include stocks and bonds from around the world; however, there are many different types available depending on what kind of risk you’re willing to take (and how much money you have). Some examples include:

  • Global equity index funds – These invest in international companies across all sectors including technology, healthcare and manufacturing sectors as well as emerging markets like China and India…


If you’re looking to diversify your portfolio, alternative investments may be the answer. They offer many benefits including greater returns and lower risk than stocks and bonds. However, they are not without their drawbacks–namely high fees and illiquidity. If you want to invest in alternatives but don’t know where to start, consider investing through an asset allocation fund which offers exposure across multiple classes at once!

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