Real Estate, Farmland, Art & 7 Other Alternative Investments for 2024


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While most investors are familiar with stocks, bonds, and cash, there is a world of investment opportunities beyond these assets.

Alternative investments are those outside of traditional assets. While they can be higher risk, alternatives can offer various potential upsides for investors, such as portfolio diversification, higher returns compared to stock and bonds, and the opportunity to earn passive income.

What Are Alternative Investments?

Alternative investments — commonly known as alts — are those that are different from conventional stock, bond, and cash categories. Alts include a wide variety of securities as well as tangible assets such as commodities, foreign currencies, real estate, art and collectibles, venture capital, derivative contracts, and more.

“It’s best to think about alternatives in one of two buckets: alternative asset classes and alternative strategies,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “These are essentially ways to get exposure to more of the investable universe than what is otherwise available through owning stocks or bonds.”

The name “alternative” doesn’t imply these investments live on the fringes of the financial world. They are literally alternatives to, or supplemental to, conventional assets.

Alts typically have a lower correlation with traditional asset classes, meaning they tend to move independently of them, and thus they may provide investors with portfolio diversification. They also have the potential to generate higher returns when compared to stocks and bonds, and some are structured to provide passive income to investors. But alts typically include higher-risk assets and strategies, which can be illiquid and harder to track, owing to a lack of transparency.

Alts used to be accessible mainly to high net-worth and accredited investors, but now they’re available to a range of investors, thanks to the emergence of vehicles such as mutual funds and ETFs that include various alternative assets and strategies.

10 Examples of Alternative Investments

The following list encompasses some common types of alternative investments and alternative strategies available to investors today.

1. Real Estate

  • Summary: You can invest in real estate by owning rental property, investing in commercial real estate, industrial real estate, healthcare facilities, and more. Investors can also buy into Real Estate Investment Trusts, or REITs.
  • Pros and cons: Although real estate tends to hold its value over time, there are no guarantees. Different properties can be vulnerable to a host of factors including business trends, land values, interest rate risk, and more.

2. Commodities

  • SummaryCommodities are raw materials that include agricultural products (e.g. grain, meat), precious metals such as gold, silver, copper, energy (including renewables), and more. Generally, investors participate in commodity trading using futures contracts, index funds, mutual funds, or ETFs.
  • Pros and cons: Some investors consider commodities a good hedge against inflation and they have the potential to deliver a profit. However, commodities can suffer from any number of unexpected risk factors, from weather conditions to supply chain breakdowns and more.

3. Private Equity

  • Summary: Private equity (PE) firms invest capital in companies that aren’t publicly traded, often with the aim of taking over the company. Because PE is a high-stakes endeavor, these opportunities are generally available to high net-worth and accredited investors. Now, however, retail investors can gain exposure through vehicles such as interval funds.
  • Pros and cons: Private equity is considered a high-risk investment, but if a private company goes public or gets acquired, these investments may perform well. The risk with private equity investments is that these are often focused on distressed companies, with a complex track record, and sometimes startups (see Venture Capital below).

4. Venture Capital

  • Summary: VC investing is a way of putting money into startups with the hope of later gains, though there is no guarantee of a return. Investors can buy a slice of startup companies through equity crowdfunding platforms (which differ from traditional crowdfunding in that investors own equity in the company) and interval funds.
  • Pros and cons: Venture capital investing is considered a subset of Private Equity, as noted above. It can be risky because if the startup fails, investors may lose all of their money. On the other hand, if a startup does well, investors may see a significant profit.

5. Private Credit

  • Summary: Private credit involves direct loans made to companies from non-bank entities. Private credit can be a more expensive way to borrow, but it can be faster for the companies needing capital, and for investors it offers the potential for steady interest payments.
  • Pros and cons: Private credit funds tend to see greater inflows when the stock market is underperforming, and they usually pay higher rates than conventional fixed income instruments. The risk here is that most PC funds offer only quarterly redemptions — so they’re quite illiquid — and they can be vulnerable to defaults.

6. Art & Collectibles

  • Summary: Works or art and other types of collectibles (e.g., wine, jewelry, antiques, cars, rare books) can personally appeal to investors, and may grow in value over time. It’s also possible to invest in fractional shares of art, or in shares of an art-focused fund.
  • Pros and cons: Investing in art or collectibles may provide a hedge against inflation or other market factors. That said, the price of upkeep, insurance, and maintenance can be considerable. And while some pieces may gain value over time, art and collectibles can also be subject to changing trends and tastes. Fraud is another risk to consider.

7. Hedge Funds

  • Summary: Hedge funds offer investors access to alternative strategies, like arbitrage, leveraged trades, short-selling, and more. Hedge funds aren’t as heavily regulated as other types of funds, so they’re able to make riskier investments and lean into aggressive strategies, with the goal of delivering outsized returns.
  • Pros and cons: While hedge funds sometimes deliver a significant profit, they charge high fees and investment minimums that often put them beyond the reach of mainstreet investors. Today, retail investors may be able to access mutual funds, ETFs, funds of funds, or other vehicles that employ similar alternative strategies.

8. Farmland/Timberland

  • Summary: Like many types of real estate, farmland and timberland tend to hold their value over time, as long as they remain productive. This type of property can be similar to commodities in that there is potential profit in the products that come from the land (e.g. produce and timber).
  • Pros and cons: Owners of farmland can lease out the land to earn income, which can be profitable for investors. The potential downside of investing in farmland and timberland are the environm

9. Infrastructure

  • Summary: Infrastructure refers to the physical structures that economies depend on: roads and highways, bridges and tunnels, energy pipelines, and more. Municipal bonds are one way to invest in infrastructure, as are some types of REITs (real estate investment trusts).
  • Pros and cons: As a non-cyclical type of asset, infrastructure investments may offer the benefit of less exposure to market risk factors, steady cash flows, and low variable costs. The risks of infrastructure investments include political and environmental factors that can impact or delay the execution of a project.

10. Foreign Currencies

  • Summary: Foreign currencies are an example of an alternative investment that can be highly liquid, and thus easier to trade.
  • Pros and cons: Currency trading is known for its volatility, and currency traders often make leveraged trades, assuming a high degree of risk. Retail investors may find it potentially less risky to invest via mutual funds, ETFs, foreign bond funds, and even certain types of CDs (certificates of deposit), although the underlying volatility of most currencies will influence the performance of these investments as well.

How Alternative Investments Work

As noted, many investors seek alternative investments because they are not typically correlated with conventional markets. Thus, investing in alternative assets may provide portfolio diversification, potentially reducing the risk of loss during a market downturn, and possibly adding to long-term gains.

Alts, and funds that focus on alternative investments, may also be structured to pay out regular dividends so that investors can earn passive income.

Owing to the nature of most alternative assets and alternative strategies, investors must also consider additional risk factors here.

The lack of liquidity for most alts means that determining the fair market value of these assets can be quite challenging. Often there is little by way of public data available regarding price changes or asset appreciation or depreciation, making it difficult to assess historical performance.

“It’s absolutely critical to look at any investment product, including alternative investments, in the context of your overall strategy,” mentions Brian Walsh. “Your goals, time horizon, and comfort risk should drive how all of your money is invested. Alternative investments could be a small part of how that money is invested, but it shouldn’t override that overall strategy.”

Advantages and Disadvantages of Alternative Investments

In sum, alternative investments are certainly worth considering given their potential advantages, but it’s important to keep in mind the possible disadvantages to make the best choices in light of your own goals and risk tolerance.


  • May offer the potential for higher risk-adjusted returns.
  • Are typically not correlated with traditional stock and bond markets, so they may help diversify a portfolio and mitigate risk.
  • May have the potential to deliver passive income.
  • Some alts may hedge against inflation or interest rate fluctuations.
  • May appeal to an individual’s personal interests: e.g., art, wine, memorabilia.


  • Are often higher risk, or can be subject to greater volatility.
  • Can be less liquid than traditional investments due to limited availability of buyers and lack of a convenient market.
  • Often limited to high net-worth and accredited investors.
  • May have higher minimum investment requirements and higher upfront fees.
  • May have less available public data and transparency about performance, making it difficult to determine an asset’s value.

How Are Alternative Investments Structured?

While often available in less conventional investment vehicles, alternative investments are also available through traditional financial structures that may be accessible to any investor. Here are some of the different ways alternative investments may be structured.


An exchange-traded fund, or ETF, is an investment vehicle that enables investors to buy a group of stocks, bonds, commodities, or other securities in one bundle, thus promoting investment diversification and efficiency. They’re widely available, usually through major investment fund companies.

Interval Funds

These closed-end funds are not traded on the secondary market and have limitations on redemptions (among other risks and restrictions). But because the funds are highly illiquid and have infrequent redemptions, fund managers may use alternative investments to pursue higher yields.


A master limited partnership, or MLP, is a business partnership that’s publicly traded on an exchange. While an MLP may sound like a company, these partnerships have a different type of structure and are restricted to natural resources and energy-related products and sometimes real estate.

MLPs can provide the liquidity of stocks, but the tax treatment can be complex — and they are higher risk than regular equities.

Mutual Funds

mutual fund is an investment vehicle that pools money from many investors in order to invest in different securities. Mutual funds may hold any combination of stocks, bonds, money market instruments, or cash and cash equivalents.

They may also include alternative investments, such as real estate, commodities, or investments in precious metals.


A real estate investment trust, or REIT, is a way of investing in shares of different types of real estate within a single fund. REITs invest in companies that own, operate, or finance a wide variety of real estate types.

How to Invest in Alternative Investments

As mentioned above, alternative investments used to be limited to accredited and high net-worth investors, but they’re now available to average investors through mutual funds, ETFs, and sometimes even through companies’ IRAs.

If you’re thinking about adding alternative investments to your portfolio, finding the right brokerage and/or asset manager can help you incorporate alts into your portfolio in the way that makes sense for your long-term plan. 

Once you’ve identified the types of alternative assets that would suit your goals, your risk tolerance, and your plan (e.g., you might prefer commodities to owning art), you can look for the funds that would help you buy into these asset classes.

Things to Consider When Investing in Alts

Alternative investments are complex, and while the risk may be worth the potential reward for some investors, there are some additional caveats to bear in mind about these assets.

How Are Alternative Investments Taxed?

Unlike conventional asset classes, which are typically subject to capital gains tax or ordinary income tax, different alts can receive very different tax treatments, even when investing in these assets via a mutual fund or ETF. When investing in alts, it’s wise to involve a professional to help address the tax-planning side of the equation.

What Role Should Alts Play in Your Portfolio?

Remember, because alts don’t generally move in sync with traditional asset classes, they may offset certain risk factors. And while alts come with risks of their own, including volatility and lack of transparency, within the context of your portfolio as a whole, alts, and funds that invest in alts, may enhance returns. Some alternative assets can provide passive income as well as gains.

It’s important to know, however, that alternative investments are higher risk, tend to be more illiquid, and less transparent. As such, alts should typically only be one part of your portfolio to complement other assets. Some advisors, for example, recommend up to a 10% allocation for alternative investments, though this number can vary.

The Takeaway

Alternative investments have the potential for high returns and may offer portfolio diversification. The scope and variety of these investments means investors can look for one (or more) that suits their investing style and financial goals. Unlike more conventional investments, alts tend to be higher risk, more expensive, and subject to complex tax treatment.

It’s important to research and do due diligence on any alternative investment option in order to make the best purchasing decisions and reduce risk. While some alternative investments are less accessible, others can be purchased through vehicles such as mutual funds and ETFs.

This article originally appeared on and was syndicated by

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor’s risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

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1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
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Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

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If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Banks With Art So Expensive, They May Be Secret Galleries

Banks With Art So Expensive, They May Be Secret Galleries

Former CEO of Deutsche Bank, Josef Ackermann, said, “A company without a collection is like a person without a memory.”

Since the 1970s, DB has grown and maintained one of the largest art collections of any financial institution on Earth, among stiff competition.

Art not only diversifies a bank’s portfolio, but it also builds their brand as tastemakers, as these collections can often be showcased in exhibitions, cultural events, and museums.

Let’s explore 5 banks with notable blue-chip art collections.

Est. Value: $65 Million

57,000+ Works

Deutsche Bank – with one of the largest corporate art collections in the world, this bank owns over 57,000 pieces including works by artists like Richter and Giacometti which have sold for millions.

Est. Value $100 Million +

30,000+ Works

UBS – acquiring art since the late 1960s, this Swiss multinational investment bank has one of the most impressive and valuable art collections in the world. While not disclosed, the collection’s value is estimated in the 100s of millions of dollars.

Est. Value Unknown

30,000+ Works

Bank of America – this bank’s collection includes more than 30,000 works of art, with pieces dating back to the 18th century. They are notorious for making their collection available to the public through various exhibitions and events.

Est. Value: Billions of dollars

30,000 + Works

JPMorgan Chase – this collection might be one of the most valuable, estimated to be worth billions, with some individual works fetching tens of millions of dollars at auction.

Est. Value: Unknown

1,800+ Works

Société Générale – a younger but still mighty collection, this French bank’s collection was created in 1995 and combines painting, graphic arts, photography and sculpture from top artists worth millions.

Think you can’t afford to invest in art? Think again. Learn more at Masterworks.

So why do these banks have such large collections? Aside from the obvious beauty and cultural significance, the finance geniuses running these organizations know a secret about fine art that the average person does not…

Historically, fine art has served as an excellent storehold of value, allowing its collectors and investors to consistently grow their wealth at a high-rate of return. Its all-weather nature comes with a history of outperformance vs. mainstream assets, and even increasing in value when inflation is high, or the stock market is sinking.

This article originally appeared on and was syndicated by


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