Explore commonly used personal finance terms.
Alternative investments refer to assets outside traditional stocks, bonds, and cash. These can include real estate, private equity, commodities, and hedge funds, which often require a higher level of expertise and understanding of the risks involved. While they can provide portfolio diversification, they are generally less liquid, have higher fees, and can be more volatile than traditional assets. Many investors use alternative investments to potentially enhance returns or hedge against market downturns.
