Alternative investments have traditionally been exclusive to institutional investors or high-net-worth individuals. However, they are now becoming more accessible to a wider range of investors, offering unique ways to diversify and potentially boost returns. If you’re considering alternatives, here’s what you need to know about this evolving investment landscape.

1. Types of Alternative Investments

Alternative investments go beyond stocks and bonds, covering asset classes like real estate, private equity, hedge funds, commodities, and art. Each comes with unique risks and potential rewards, offering ways to diversify portfolios outside traditional markets. Capital Engine® marketplace makes it easier to explore these options.

2. Benefits of Diversifying with Alternatives

Alternative assets often have a low correlation to traditional assets, meaning they may perform well even when the stock market is volatile. For example, real estate and commodities often act as hedges against inflation, providing stability when other assets lose value. Adding alternatives can be a strategic move for investors to balance risk and return over time.

3. Increased Accessibility Through Technology

Advancements in technology and regulatory changes are making alternatives more accessible to individual investors. Crowdfunding platforms, fintech solutions, and private investment marketplaces allow investors to access previously unattainable asset classes. Now, you don’t need a vast amount of capital to diversify into alternative assets.

4. Considerations and Risks

While alternatives offer diversification, they also come with unique challenges. Many are illiquid, meaning it can be difficult to quickly sell or exit an investment. Additionally, the lack of regulation in some alternatives, such as private equity and hedge funds, requires careful due diligence. Researching each asset type, understanding fees, and assessing liquidity needs are essential steps before investing.

5. How to Start Investing in Alternatives

If you’re ready to add alternatives to your portfolio, start by defining your investment goals and risk tolerance. Begin with asset types that align with your objectives and consider working with a financial advisor to identify opportunities that fit your overall strategy. Additionally, Capital Engine® Private Markets offers tools and resources to help you explore and invest in alternative assets safely and efficiently.

Ready to Explore Alternative Investments?

Alternative investments can enhance your portfolio by providing diversification and the potential for higher returns. To learn more about how to get started or to explore current offerings