Alternatives encompass all the investments that do not fit in the conventional asset classes of cash, fixed income, and public equities. Even private investments are usually considered to be alternatives. Currency, gold, real estate, natural resources, art—virtually anything you can buy and sell—can be an alternative. The possibilities within the category of alternatives are almost endless, and their risk/return profiles are all over the map.
Why consider alternatives?
People invest in these assets for a variety of reasons. They may be pursuing portfolio diversification, a hedge against inflation, opportunities to grow wealth, or a personal interest. This article from the Aspen Fund gives six reasons why you might want to consider putting your money into more than just cash, stocks, and bonds. The options for accredited and nonaccredited investors are different, but it is possible to invest in alternatives for as little as $100.