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Alternative investment

An alternative investment, also known as an alternative asset or alternative investment fund (AIF),[1] is an investment in any asset class excluding capital stocks, bonds, and cash.[2] The term is a relatively loose one and includes tangible assets such as precious metals,[3] collectibles (art,[4] wine, antiques, vintage cars, coins, watches, musical instruments, or stamps[5]) and some financial assets such as real estate, commodities, private equity, distressed securities, hedge funds, exchange funds, carbon credits,[6] venture capital, film production,[7] financial derivatives, cryptocurrencies, non-fungible tokens, and Tax Receivable Agreements.[8] Investments in real estate, forestry and shipping are also often termed "alternative" despite the ancient use of such real assets to enhance and preserve wealth.[9] Alternative investments are to be contrasted with traditional investments.

Research[edit]

As the definition of alternative investments is broad, data and research vary widely across the investment classes. For example, art and wine investments may lack high-quality data.[10] The Goizueta Business School at Emory University has established the Emory Center for Alternative Investments to provide research and a forum for discussion regarding private equity, hedge fund, and venture capital investments.

Low with traditional financial investments such as stocks and bonds[21]

correlation

It may be difficult to determine the current market value of the asset

Alternative investments may be relatively illiquid (see "")

liquid alts

Costs of purchase and sale may be relatively high

There may be limited historical risk and return data

A high degree of investment analysis may be required before buying

Alternative investments are sometimes used as a way of reducing overall investment risk through diversification.


Some of the characteristics of alternative investments may include:

Art valuation

Chartered Alternative Investment Analyst

Diamonds as an investment

Gold as an investment

Inflation hedge

Investment wine

Palladium as an investment

Philatelic investment

Platinum as an investment

Silver as an investment

Traditional investments

H. Kent Baker and Greg Filbeck (2013). Alternative Investments: Instruments, Performance, Benchmarks and Strategies. John Wiley & Sons.  978-1-118-24112-7.

ISBN

David M. Weiss (2009). Financial Instruments: Equities, Debt, Derivatives and Alternative Investments. Portfolio.  978-1-59184-227-9.

ISBN

How To Invest In Stamps And Coins. Quick Easy Guides. 2008.  978-1-60620-661-4.

ISBN

Portfolio Diversification benefits of Investing in Stamps by Chris Veld, University of Stirling. (Incomplete first draft)