Traditional investments include stocks, bonds, and cash. Alternative investments describe a much wider range of assets, from niche collectibles to real estate.

Traditional assets are typically liquid, highly regulated, and accessible for retail investors via taxable brokerage accounts or retirement accounts. Alternative investments are non-conventional assets that may provide diversification because they don’t move in tandem with conventional markets, which can help mitigate certain risk factors.

Most investment management companies define 2 categories of investment; traditional investment options which include stocks, bonds & cash, and alternative investment options which include any investment options that does not fit in the traditional category. Each category has investment options that offer varying benefits, risks, and rewards.

Traditional investments include long-only position in stocks, bonds and cash. All other investments are classified as alternative investments. Alternative investments include investments in: real estate commodities private equity hedge funds