When we have an “alternative” option, we are actually stating that we also have a conventional one. Let us explain alternative investment in this way to make it easier to comprehend.
Conventional investment usually includes equity, income, and cash categories. Alternative investments refer to assets that do not fall within these categories. Some examples of alternative investments are private equity or venture capital, hedge funds, real property, commodities, and tangible assets.
What sets alternative investments apart from the conventional ones is that they have fewer regulations from the U.S. Securities and Exchange Commission (SEC) and are somewhat illiquid.
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