When compared to stocks and bonds, alternative investments are often less regulated

Not all alternative investments are easy to invest in

For instance, some alternative investments are only available to accredited investors or high-net-worth individuals. Others have relatively high fees compared to traditional investments.

People often invest in alternative investments to diversify their portfolios

Because alternatives often have little correlation with traditional investments like stocks and bonds, adding them to a traditional portfolio can reduce its overall risk exposure.

Alternative investments carry unique tax implications

The specifics depend on the type of alternative asset, as well as how long you hold it for, and your income.

Alternative investments can include everything from cryptocurrency to fine art

The financial assets typically fall outside the scope of traditional investments like stocks and bonds, and they’re often intended to diversify investor portfolios.

Explore a guide to investing in alternatives

Investors often use alternative investments, from collectibles to real estate, as a way to diversify their portfolios in case of market volatility. Getting started investing in these alternatives differs depending on the investment.

Alternative investments have become more popular since the 2008 financial crisis

When the traditional markets crashed during the 2008 financial crisis, many people saw the value of their traditional investments plummet and began to look into alternatives as a result.

Alternative investments can be sorted into seven major categories, according to some experts

These categories include real estate, private equity, private debt, hedge funds, collectibles, and more.

The alternative investments industry is expected to grow significantly in the coming years

More specifically, as of 2024, the alternative investments industry was expected to grow to more than $24T in assets in 2028—up from roughly $15T in 2022.

Pension funds' allocations to risky, alternative investments increased by 25% between 2001 and 2021

The portion of pension funds' risky investments, including alternative investments such as private equity, increased from 14% in 2001 to 39% in 2021. Analysts say private equity investments have delivered higher returns than traditional assets like stocks and bonds. Increased investment in private equity has also given pensions a way to recover from the 2008 financial crisis without necessarily investing more money.

The difference between stocks and bonds

While more people invest in stocks than bonds, experts say owning both can make for a healthier portfolio. Stocks are considered a riskier investment than bonds, but tend to have higher returns. While bonds might be the safer option, they won’t grow your wealth as quickly.

Private credit and private equity are both alternative assets

Like private equity fund managers, private credit managers typically raise funds directly from investors, lending to corporations. The borrowers can benefit from the lack of middlemen and resulting efficiency, and the lenders often yield comparatively higher returns.

Investing in bonds comes with a few risks

Think: changes in interest rates that impact the bond’s value, or a bond issuer completely defaulting on a loan. There are steps investors can take to lower their initial and future risk when investing in the bond market, such as checking a company's bond rating before investing.

Explore an alternative investments timeline

From what’s known as the first leveraged buyout, when JPMorgan acquired the Carnegie Steel Company, to the creation of the first-ever hedge fund, alternative investments have a long history.

More than half of today’s family offices were incorporated after 2010

Family offices are impacting capital markets as private wealth grows. Compared to other financial entities, they have a relatively high allocation to alternatives.

Can random investments outperform managed funds?

The biggest selling point of mutual funds is they're usually actively managed. Depending on your investment strategy, this could be a breaking point. This podcast episode includes a conversation with a Wall Street Journal columnist about why one-off investments are sometimes better for your portfolio than an actively managed investment.

Retail investors are not professionals—they invest their own money

For retail investors, the stakes may seem higher and more personal. Critics say that this dynamic means that retail investors are more susceptible to behavioral biases that could lead them to make poor decisions when it comes to buying and selling assets. For instance, fear of missing out could cause a retail investor to buy a stock that is popular but not a financially worthy investment.

The pros of exchange-traded funds include ease of access through brokerage apps and retirement savings accounts

One unexpected perk is that ETFs are typically associated with lower capital gains tax requirements. Read this list to learn more about the benefits of investing in ETFs.

Open-end and closed-end funds differ in how they create and distribute shares

Open-end funds are able to create new shares on a daily basis, while closed-end funds have a set number of shares. This impacts the way shares are traded on the open market, and the way they’re priced.

Treasury bonds, notes, and bills are critical vehicles for the federal government to raise money for public expenses and manage the national debt

For investors, they're all usually considered low-risk options since they’re backed by the federal government.

Angel investors typically fund a startup at an earlier stage than venture capitalists

Angel investors and venture capitalists both invest in startups, but they differ in a few key ways. Angel investors typically invest earlier and in a smaller amount.

Annuities are regulated at the state level

However, certain types of annuities, like indexed annuities, are also nationally regulated by the SEC and the Financial Industry Regulatory Authority to protect investors.

How prediction markets differ from sportsbooks matters for regulation

There are a number of differences and similarities between sportsbooks and prediction markets, despite both allowing people to bet on outcomes for sports-related events. For instance, prediction markets typically earn revenue through transaction fees rather than taking directional exposure to outcomes.

Special-purpose acquisition companies let companies skirt the IPO process

A video explains how private companies have taken advantage of this loophole, why investing in these companies isn’t always a good idea, and how blank-check companies (as they’re commonly called) work.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

Learn about the differences between traditional and Roth IRAs

Traditional IRAs allow tax-deductible contributions, but withdrawals in retirement are taxed as income. Roth IRAs use after-tax dollars, offering tax-free withdrawals later, but income limits may restrict eligibility. Choosing between the two depends on your financial situation today and your future tax outlook.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Many bitcoin enthusiasts have compared the cryptocurrency to digital gold

Gold is valued for its stability and reliability, serving as a hedge against inflation and economic uncertainty. Bitcoin shares both of these characteristics, but also provides near-instant liquidity and isn’t subject to government regulation.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Watch this video that uses Lego bricks to explain how venture capital works.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

While atoms are normally made of protons, neutrons, and electrons, exotic ones have been built with antimatter—alternate versions of normal matter that live for fractions of a second and are about a billion times as rare.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

Despite being favored by 87% of Americans, Congress does not have term limits.

Indefinite cloning of some endangered species may not sustain their longevity because cloning success rates decrease as genetic mutations accumulate.

Most of the observable universe's volume consists of voids and supervoids—enormous regions of space with little to no galaxies, stars, or light.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

Frank Lloyd Wright's houses are historically hard to sell because they're old, subject to local landmark commissions, and often unfashionable

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

Telehealth demand for GLP-1s for weight loss is booming as consumers seek easier access.

Chaos theory—informally known as the butterfly effect—is the reason why weather forecasts are presented with probabilities rather than certainties.

Explore the known asteroids, comets, and spacecraft involved in asteroid studies within our solar system with 'Eyes on Asteroids,' a 3D visualization from NASA.

Play the role of a student in a game where you try to navigate college and remain debt-free, selecting different income levels, high school experience, race, ethnicity, and more.

Poison ivy is in the same family as mangoes, cashews, and pistachios—and they all produce oily urushiol in their raw, unprocessed state—but they are typically prepared in ways to avoid causing human discomfort.

Famed poet TS Eliot rejected the manuscript for George Orwell's political fable 'Animal Farm,' writing that its criticism of authoritarianism was not 'the right point of view.'