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What are “Alternative Investments?”

An alternative investment is one that does not involve the traditional investments of stocks, bonds and cash. It includes tangible assets such as precious metals, art, antiques, or coins, as well as financial assets such as commodities, private equity, and hedge funds. Real estate often falls under the term “alternative investment.” Such investments are often used to diversify, thereby reducing overall risk.

Alternative investments such as real estate often require a high degree of investment analysis before buying. They may also be relatively illiquid.