Alternative Investment - Characteristics

Characteristics

Alternative investments are sometimes used as a tool to reduce overall investment risk through diversification.

Some of the characteristics of alternative investments may include:

• Low correlation with traditional financial investments such as stocks and shares
• It may be difficult to determine the current market value of the asset
• Alternative investments may be relatively illiquid
• 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