Passive Income•Beginner
Understanding Alternative Investments
Where alternatives can help a portfolio — and where reported returns mislead.
By Dana Whitfield, Editor-in-Chief8 min readUpdated 2026-07-30✓ Fact-checked
Alternatives cover everything outside public stocks, bonds and cash: private equity, private credit, real estate, art, farmland and collectibles.
The valuation illusion
Assets marked quarterly by appraisal look less volatile than assets priced every second. Smoothing is not the same as safety.
Questions to ask
- What are total fees, including performance fees?
- How and when can I exit?
- What happens in a downside scenario, not just the base case?
We may earn a commission if you open an account through links on this page. Our ratings and analysis are independent and are never influenced by partnerships. Full disclosure.