Alternative investments fall under the ‘Explore’ component of your portfolio and are generally private (non-market traded) securities, focused in unique markets, asset classes, strategies or sectors. These investments are established based on distinctive strategies that may not be available in traditional stocks, bonds or mutual funds. These investments can be equity or debt securities, and they can be complex or very simple.
Alternative investments are not at the periphery anymore – they have become more mainstream. With the introduction of recent regulations, private investments are now available to more than just institutional investors and high-net-worth individuals. Though our investments may not be suitable for everyone, they generally complement most portfolios. Selected properly, their diversifying benefits can protect downside risk and enhance returns, which is one reason why sophisticated investors have been using alternative investments for many years.