101 Concepts for the Level I Exam
Concept 95: Alternative Investments v/s Traditional Investments
Traditional investments include long-only position in stocks, bonds and cash. All other investments are classified as alternative investments.
Alternative investments include investments in:
- real estate
- private equity
- hedge funds
Compared to traditional investments, alternative investments typically have:
- lower liquidity.
- less regulation.
- lower transparency.
- higher fees.
- limited and potentially biased historical risk and return data.
- unique legal and tax considerations.