Defining Alternative Investments

Defining an alternative investment: an investment that is not among the three traditional types: equities, bonds or mutual funds is considered and alternative investments. Most alternative investment assets are held by institutional traders or accredited, high-net-worth people due to their complex nature of the investment. Alternative opportunities include hedge funds, Forex managed accounts, property, and exchange-traded futures contracts. Alternative investments aren’t correlated with the world stock markets which makes them highly sought after by investors seeking returns uncorrelated to traditional investments. Alternative opportunities are preferred due to the fact their returns possess a low correlation with the worlds major markets. Due to this, many sophisticated investors, such as banks and endowments, have started to allocate a part of their investment portfolios to alternative investment opportunities. While a small investor might not have had the opportunity to invest in alternative investments in the past, they can know to invest in individually managed Forex accounts.