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Portfolio With Alternative Investments

What Are Alternative Investments?

 

When we talk about investments, everybody thinks about certain products – shares, bonds, fixed deposits etc. Right? However, over the years, the world of investment has gone through a sea change and now, many other products are available to bring diversity to your portfolio. These are called Alternative Investment products. 

 

In this module, we will tell you all about alternative investment and also discuss some of the most important things that you should know about while creating a portfolio. 

 

So, let’s begin:

 

To begin with, let us understand what is an alternative investment?

 

To put it simply, any investment product that is not a traditional investment is an alternative investment. Unlike traditional investment products, an alternative investment may or may not be regulated. 

 

The world of alternative investment is massive and can range from hedge funds managed by professional fund managers to gourmet vintage wines grown several decades ago in a family-owned small vineyard in some corner of the world. 

 

Alternative investment products can be tangible such as gold or intangible such as cryptocurrencies, hedge funds or private equity. 

 

Some alternative investments can be quite complicated in nature and can be illiquid. That is why for long time, they were popular among institutional investors. However, thanks to ETFs and mutual funds – alternative investments have become easily accessible to retail investors as well. 

 

While some people put real estate in the category of traditional investment, others consider it as an alternative investment. Since in India, traditionally people have considered buying a house or land as a form of investment, we will consider real estate as a traditional investment for this module. 

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