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How alternative assets like gold can help your portfolio

Alternative assets offer ways to invest beyond stocks and bonds. Getty Images/iStockphoto

Whether you're a seasoned investor or just starting to build a portfolio, you're probably familiar with traditional assets. These include stocks and bonds (which are often combined into funds, like mutual funds or ETFs), as well as cash.

However, alternative assets can also be an important part of any portfolio. There are plenty of options when it comes to alternative assets, each with different benefits and value propositions. For example, commodities like gold can be good for diversifying when markets are volatile, while investing in real estate can similarly help you diversify into different markets or even increase your cash flow.

Gold is an example of an alternative asset that acts as a long-term store of value and hedge against inflation. Learn more about investing in gold with a free investors kit today.

What are alternative assets?

Like their name implies, alternative assets are primarily alternatives to conventional investments in stocks and bonds. A mix of different investment types can be a good way to round out your portfolio and prepare for whatever the economic future may bring.

If you're not sure which alternatives might be good for diversifying your portfolio, here are a few examples:


There are a few different reasons why you may want to invest in gold. First, it makes a great diversifier because its price can perform independently from the stock market. So during periods of market volatility when your other investments are falling, the money you have in gold may help reduce your losses. Gold can also be appealing to investors when inflation is high; it tends to hold its purchasing power in the market even when the value of the U.S. dollar decreases.

You might choose to invest in gold by owning physical gold bullion (coins or bars). But you can also invest in gold through ETFs that hold gold mining companies, gold futures, a gold IRA and more.

Explore options for investing in gold today.


Like gold, silver is considered another precious metal commodity and you can buy it in many of the same ways. It's also often seen as a hedge against market volatility — but silver is much less expensive to buy into than gold and often more volatile, too. 

Collectibles and art

This type of investment asset can vary widely and may depend on your own personal taste. The value of collectibles lies in their ability to store value over time, generally because they become more in demand among collectors because they are rare or sought after. Some examples may include an original painting by a well-known artist, sports or film memorabilia and even certain wines or stamps.

There's no guarantee that collectibles will be worth a lot in the future since the value can largely depend on whether there's a market for the item at the time. What's more, the condition of the item can play a big part in the price you're able to get, which can be an added risk the longer you hold onto a collectible.

These aren't the only alternative assets, of course. Some others you might come across include real estate, cryptocurrency, private equity and more. With any alternative asset, look for information about how speculative the market is, volatility and price fluctuations before you invest. You may also want to speak with an expert who can help you decide if any new asset is right for your goals.

What to know about alternative assets

One important thing to keep in mind if you're considering adding alternative assets to your portfolio is that they're generally considered good ways to diversify but they're not the only ways you should invest your money.

Alternative assets can help you weather periods of uncertainty or provide some stability but you don't want to give up on traditional investment standards either.

Especially if you're investing for long-term goals like retirement, it can be good to keep holdings in traditional stock and bond funds. This is a good way to take on some risk (though not the outsized risk of some alternative investments) while still maximizing earnings over time (rather than relying on the limited returns of safer alternatives). 

The bottom line

Diversification is one of the most important aspects of a well-rounded portfolio. You don't want to put all your eggs into a single asset or investment type, after all. Alternative assets can help you diversify, but consider your options and always make sure the investments you choose align with your financial goals. 

If you're looking for stability amid today's uncertain economic climate, gold might be an alternative asset to consider. Explore your options with a free investment guide.

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