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What to Consider Before You Invest in Alternatives

The article from Kiplinger discusses the considerations for investing in alternative investments, which include assets like real estate, commodities, hedge funds, private equity, and collectibles. These alternatives can diversify a portfolio, potentially reducing risk and enhancing returns, but they come with unique challenges. Key points to consider include the higher fees associated with these investments, their lower liquidity compared to traditional stocks and bonds, and the often complex nature which might require specialized knowledge or access through private markets. The article highlights the importance of understanding the risk-return profile, the need for due diligence, and the potential for these investments to not correlate with traditional markets, thus providing a hedge against market volatility. It also advises investors to assess their own investment goals, risk tolerance, and time horizon before diving into alternatives, and suggests that these investments might be more suitable for accredited investors or those with significant capital to allocate.

Read the Full Kiplinger Article at:
[ https://www.kiplinger.com/investing/invest-in-alternatives-what-to-consider ]