Take the alternative route – Alternative investments seek to balance portfolio risk and return

Description

Abstract: Alternative investments (or “alternatives”) have gone mainstream in recent years. Hedge funds and hedging strategies, such as long-short, increasingly are becoming popular with investors seeking better diversification and risk-adjusted returns. That said, alternatives involve unique risks and aren’t appropriate for every investor. But not all alternatives increase portfolio volatility — some are designed to lower it. This article examines some of the various types of alternatives.