Alternative Investments in 2025: Where to Look Beyond Common Choices

July 10, 2025

If you’re feeling uncertain about where the market is headed in 2025, you’re not alone. Investors everywhere are weighing their options as interest rates shift, inflation lingers, and traditional markets continue to surprise. That’s why conversations around alternative investments are picking up speed. More people are starting to look beyond the usual choices, searching for new ways to help grow and protect their wealth.

Last year, we published a comprehensive guide focused on alternative investments for retirees. If you haven’t seen it yet, you might find it helpful—The Essential Guide to Alternative Investments for Retirees breaks down why these options matter and how they can play a role in a well-balanced portfolio. But in 2025, things are evolving. Markets move fast, and what worked before isn’t always the right fit now.

Whether you’re looking to add diversification or simply want to explore what’s out there beyond common investments, the alternative space is full of possibilities. There’s no one-size-fits-all answer, but with the right approach, you can find opportunities that fit your financial goals and comfort level—no matter how the broader markets behave.

What Are Alternative Investments?

Alternative investments are assets that fall outside the traditional categories of stocks, bonds, and mutual funds. The most common alternative investments include real estate, private equity, hedge funds, commodities, and private credit.

People turn to alternative investments because they offer different growth opportunities and can help lower risk in a portfolio. While traditional assets often move together during market swings, alternatives may follow their own path. This is one reason many investors use them to add balance or seek returns that don’t always match up with the stock or bond markets.

Real estate gives you access to income and long-term appreciation. Private equity and private credit let you invest in businesses and lending opportunities that aren’t traded on public exchanges. Cryptocurrency brings digital assets like Bitcoin and Ethereum into the mix, while commodities such as gold, oil, and agricultural products offer a hedge against inflation. Art and collectibles, along with infrastructure projects like roads and renewable energy, round out the group.

With so many choices, alternative investments can play different roles in your portfolio—offering potential growth, diversification, and new ways to manage risk.

How to Buy Alternative Investments in 2025

When you’re considering alternative investments, the way you buy them can depend on the type of asset and your financial goals. Some alternative assets, like real estate, can be purchased directly—think of owning a rental property or buying land. Others, such as private equity, private credit, or hedge funds, often require you to invest through specialized funds or partnerships. These may have specific requirements for who can participate, including whether you need to be an accredited investor.

Digital platforms are also giving people new ways to access alternative assets like real estate, art, or even small business loans. These platforms may allow you to get started with smaller amounts than traditional investment funds, but you’ll want to review each platform’s rules, fee structures, and track record.

It’s important to understand the risks, the holding periods, and the liquidity of any investment you’re considering. Many alternative assets are not easily sold and may require you to commit your money for several years. You’ll also want to check for transparency—look for clear information on performance, fees, and any restrictions.

Whether you’re interested in real estate, private credit, commodities, or hedge funds, it’s wise to do your research or talk with a financial advisor who understands alternative investments. Review your goals and risk comfort before adding any new asset to your portfolio, so you can make choices that fit your overall plan.

Why Consider Alternative Investments in 2025?

With ongoing worries about inflation, interest rate shifts, and uncertain markets, a growing number of investors are looking at alternative investments to help build and protect wealth. Here’s why you might think about including alternative assets in your mix this year:

Steady demand and growth

Global assets under management in alternatives—covering private equity, credit, real estate, infrastructure, hedge funds, and commodities—have expanded sharply. They surged from around $7 trillion in 2014 to over $18 trillion in 2024, and projections estimate nearly $29 trillion by 2029. The chart shows steady growth over the past decade, with strong expectations for continued increase.

Non‑correlated performance

One of the biggest reasons investors look at alternative investments in 2025 is because these assets often don’t follow the same patterns as stocks and bonds. When traditional markets become unpredictable, alternatives such as private equity, real estate, or hedge funds may move on their own cycles.

This difference in performance can help cushion your portfolio when volatility strikes the public markets. By blending in assets that are less tied to the daily ups and downs of stocks and bonds, you may find it easier to maintain steady returns—even when headlines make the market feel uncertain.

Many wealth advisors encourage using alternative assets as a way to help balance risk and smooth out your overall investment journey

Inflation responsiveness

Inflation has been a big topic over the past few years, and it remains a concern heading into 2025. Traditional investments don’t always keep pace with rising prices, but certain alternative assets are known for their ability to respond to inflation.

Commodities, real estate, and infrastructure projects, for example, often see their values adjust as the cost of living goes up.

Rental income from property or the value of farmland, for instance, can rise along with inflation. This is why many investors are now viewing alternative investments as important tools for protecting purchasing power in a changing economy.

More investor access

It wasn’t too long ago that alternative investments were mostly reserved for institutional investors or people with very high net worth. Today, things are different. You can find a variety of platforms and funds that open the door to alternative assets—sometimes with lower minimums and more flexible terms.

Even some retirement plans are starting to offer select access to private equity or private credit funds. This expanded access gives you more choices when it comes to building a portfolio that reflects your goals, values, and risk comfort.

The shift has allowed a broader range of investors to participate in the growth and diversification potential of alternatives.

Favorable Macro Trends

Looking at the big picture, several long-term economic trends are making alternative investments more attractive in 2025. Infrastructure spending continues to rise, driven by both government and private investments.

The growing importance of technology and digital assets is creating new opportunities in areas like private credit, venture capital, and real estate tied to data centers or clean energy.

Resource transformation—including shifts in how the world uses energy, water, and minerals—offers new ways to invest outside public markets. These macro trends are expanding the types of alternative assets available, giving you more ways to align your investments with the world’s changing needs.

What Are the Recommended Alternative Investments in 2025?

Alternative investment trends continue to evolve as markets respond to economic changes, policy shifts, and new technology. In the current U.S. market, investor interest has shifted toward certain types of alternative assets.

These investments attract attention because they offer fresh approaches to diversification and growth.

Here’s a quick overview of the alternative investment opportunities drawing focus in 2025:

• Real Estate Investing: Property remains a go-to option for those seeking income, capital appreciation, or inflation protection through direct ownership, funds, or new digital platforms.
• Cryptocurrency Investing: Digital assets like Bitcoin and Ethereum are now widely discussed for their growth potential and the role they might play in a modern, diversified portfolio.
• Art Investing: Art and collectibles provide a way to participate in tangible assets, and fractional ownership platforms make this area more accessible than ever before.
• Private Equity: Investing in private businesses allows you to participate in growth stories that aren’t tied to public stock markets.
• Private Credit: Lending to private companies or participating in private debt funds has become more popular as investors look for different ways to generate income.
• ESG-Aligned Investments: Assets that meet environmental, social, and governance criteria are getting more attention as investors look to align their portfolios with their values.
• Infrastructure Investments: From renewable energy to transportation, infrastructure projects can offer long-term income streams and potential growth.
• Commodities: Traditional assets like gold, silver, oil, and agriculture products remain staples for those looking to hedge against inflation and add diversification.

Each of these categories brings its own mix of risk, opportunity, and potential role in a well-structured portfolio. Next, let’s look at each one in more detail.

Real Estate Investing

Real estate continues to be a central pillar for investors seeking steady income and long-term value growth. As we look at 2025, several key trends and data points shape the outlook for property investment in the United States.

Resilient Demand and Rising Prices

• Home sale prices in many U.S. markets are rising, even after a period of rapid gains in previous years. According to recent research, home prices are now growing at a more sustainable rate, which may provide a healthier environment for new and existing investors.
• The U.S. housing market outlook shows steady demand, supported by population growth, limited housing supply, and shifts in migration patterns. These factors continue to keep upward pressure on prices, particularly in high-demand metro areas.

Multiple Ways to Invest

• Direct ownership: Buying residential or commercial property gives you control over rental income and long-term appreciation.
• Real Estate Investment Trusts (REITs): REITs let you invest in real estate portfolios that generate income from a mix of properties. They are traded like stocks and offer easier entry points for many investors.
• Fractional property platforms: Technology now allows for fractional ownership, letting you invest in shares of properties with smaller initial outlays.

Performance and Outlook

• According to Statista, the U.S. real estate market continues to expand, with market size projected to reach new highs in 2025.
• Deloitte’s outlook for 2025 highlights ongoing investor interest in rental properties, logistics hubs, and niche sectors like senior housing and data centers. Real estate is also drawing attention as an option for diversifying portfolios and potentially offsetting inflation.

Why Investors Still Like Real Estate

• Real estate tends to behave differently than stocks or bonds, offering a way to balance risk and seek returns in changing markets.
• Rental income can provide consistent cash flow, while long-term appreciation helps build value.
• Property can serve as a hedge against inflation, since rents and values often rise along with general price levels.

With steady demand, rising prices at a more measured pace, and a variety of ways to get involved, real estate remains an attractive choice for investors looking to build and protect wealth in 2025.

What really makes real estate appealing as an alternative investment? It tends to move independently from stocks and bonds, which can help smooth out your portfolio when markets get choppy. Rental income brings steady cash flow, and property values have the potential to rise over the long term. Plus, real estate often acts as a hedge against inflation, with both rents and property values adjusting as prices in the broader economy increase.

Cryptocurrency Investing

Cryptocurrency is no longer just a buzzword—it’s now a core topic in alternative investing. The rapid evolution of digital assets like Bitcoin, Ethereum, and a growing list of other cryptocurrencies has caught the attention of investors at every level.

Strong Market Growth and Size

• According to Fortune Business Insights, the global cryptocurrency market size reached $2.3 trillion in 2023, and analysts expect the market to expand at a compound annual growth rate (CAGR) of 12.5% from 2024 to 2032. This ongoing expansion is driven by greater adoption, new blockchain applications, and more recognition from traditional financial institutions.
• In the U.S. specifically, the cryptocurrency market continues to grow, reflecting both consumer and institutional interest. Grand View Research reports that in 2022, the U.S. crypto market was valued at over $250 billion, with projections for steady growth as more payment systems, investment platforms, and businesses integrate digital assets.

Active and Liquid Markets

• Real-time data shows daily trading volumes in the billions for major cryptocurrencies and a range of digital assets. Over the past year, top crypto prices have fluctuated widely—sometimes ranging by tens of thousands of dollars—which highlights both the volatility and the opportunities in this market.
• Investors now have access to platforms that support trading and exploring hundreds of digital assets, making it easier to diversify within the cryptocurrency space.

Why Investors Are Paying Attention in 2025

• Growth Potential: With a multi-trillion-dollar market and annual double-digit growth forecasts, digital assets offer significant upside for those who can tolerate price swings.
• Portfolio Diversification: Crypto moves independently of traditional markets, making it an option for reducing correlation and spreading risk.
• Increased Adoption: As more institutional investors and global payment networks participate, digital assets are gaining credibility and stability.
• Blockchain Innovation: Emerging uses of blockchain technology (such as decentralized finance, tokenized assets, and NFTs) continue to drive interest and expand the crypto ecosystem.

Considerations for 2025

• Volatility: Prices can move dramatically in short periods, so crypto isn’t for everyone.
• Security and Regulation: Keeping assets safe and staying updated on evolving rules is important.
• Research Is Key: Each coin or token has its own risk profile, use case, and long-term potential.

Art Investing

Art investing has stepped into the spotlight as a practical option for those looking to diversify beyond traditional assets. What once seemed reserved for elite collectors is now accessible to a broader group of investors, thanks to fractional ownership and digital platforms.

Accessible Entry Points

• In the past, owning valuable artwork meant having significant capital. Today, fractional ownership allows you to buy shares in high-value pieces or collections, lowering the barrier to entry. This approach lets you participate in the potential upside of the art market without needing to purchase a whole piece outright.

Potential Inflation Hedge

• Art and collectibles can serve as a store of value, especially during times of inflation. Unlike many financial assets, art prices often move independently of the stock and bond markets. Historically, certain segments of the art world have held or even increased their value as economic conditions shift.

Diversification and Non-Correlation

• Adding art to your portfolio introduces an asset that isn’t tied to public markets or interest rates. This non-correlation may help reduce overall volatility and offer steadier returns when other investments experience turbulence.

Market Trends

• Global art market sales reached over $65 billion in 2023, with steady interest from both private collectors and institutional investors. Modern and contemporary art continue to see strong demand, and new ways to access artwork—including online sales and digital auctions—are attracting a younger, tech-savvy audience.

What to Consider

• Like any alternative investment, art carries its own set of risks. Prices can be volatile, and liquidity may be limited, meaning it can take time to find buyers when you want to sell. Authenticity and provenance are also important—working with reputable platforms or advisors can help manage these challenges.

Private Equity

Private equity investing puts you behind the scenes in companies that aren’t listed on public exchanges. This could mean backing innovative startups, family businesses, or established firms looking for capital to grow. In 2025, private equity remains a dynamic part of the alternative investment world, with recent trends providing useful insights for investors.

Deal Activity and Market Trends

• The private equity market has shown signs of renewed energy. After a slower period, global deal values have started to climb, with total investments in early 2025 reaching over $345 billion—an increase compared to the same time last year.
• More than 4,800 deals closed in the first quarter of 2025, which not only tops last year’s pace but also marks a noticeable uptick from recent quarters.

Access to Growth Opportunities

• Private equity allows you to invest in growth stories that aren’t visible in the stock market. These can include technology disruptors, health care innovators, or companies going through strategic transformations.
• With more capital flowing into this space, both the size and the number of opportunities continue to expand.

Liquidity and Time Horizon

• It’s important to understand that private equity investments are less liquid than stocks or bonds. Capital is usually committed for several years, and access to your investment may only come when a company is sold or goes public.
• This longer time horizon is balanced by the potential for higher growth, especially when portfolio companies perform well.

What to Watch For in 2025

• The recovery in deal flow, new fundraising activity, and ongoing demand for innovation are shaping private equity’s outlook. More investors are using private equity to complement their traditional portfolios and to capture opportunities that public markets might not offer.

Private equity in 2025 gives you a seat at the table with growing businesses. With deal activity rebounding and more ways to get involved, this asset class can offer diversification and long-term growth potential—but it comes with a longer commitment and less immediate liquidity. If you’re looking for alternative investments to round out your strategy, private equity remains a compelling option for investors with patience and an eye for new opportunities.

Private Credit

Private credit has carved out a spot as a key alternative investment option. Instead of going through traditional banks, private credit lets investors lend directly to private companies or participate in funds that focus on business lending.

Why Investors Are Looking at Private Credit

• Flexible Lending: With banks tightening their lending standards, more businesses are turning to private lenders for funding. This shift opens doors for investors to participate in loans to established companies, growth-stage businesses, or those in need of flexible capital solutions.
• Different Risk and Reward Profiles: Private credit investments range from senior secured loans to mezzanine debt, each offering different levels of risk and potential income. Investors can select options that fit their goals, whether seeking steady cash flow or higher yields with added risk.
• Steady Demand: Private credit markets have seen strong growth in recent years. More companies are seeking alternatives to traditional bank loans, fueling expansion in this space.

Market Growth and Opportunities

• The private credit market continues to expand, with global assets under management reaching record highs. Direct lending, distressed debt, and specialty finance are some of the sectors seeing the most attention.
• Investors often look to private credit for income generation, since loans typically pay interest at set intervals, providing potential cash flow that isn’t tied to public equity markets.

Things to Consider

• Liquidity: Private credit investments usually require a commitment of several years. Unlike stocks or bonds, it may not be possible to sell your investment quickly.
• Due Diligence: Understanding the quality of the companies receiving loans, the structure of each deal, and the risks involved is key. Not every loan is created equal.
• Risk Management: Since private credit is less regulated than public debt, there’s a greater need to assess each opportunity carefully.

Private credit in 2025 offers investors a way to access different sources of income and tailor risk profiles outside of traditional markets. As banks continue to pull back on business lending, private credit stands out as an alternative worth considering—especially for those seeking steady income and willing to commit to a longer holding period.

ESG-Aligned Investments

ESG-aligned investments are gaining traction as more people look to have a positive impact with their money. ESG stands for environmental, social, and governance—three key factors that guide this investment approach. In 2025, interest in these assets continues to rise, with more investors considering how their portfolios can support sustainability, community, and ethical management.

Market Growth and Trends

• The market for ESG investing has grown rapidly. Global ESG assets are projected to reach over $40 trillion by 2030, showing strong momentum in both individual and institutional portfolios.
• Companies and funds that prioritize clean energy, responsible supply chains, and diversity in leadership are attracting more attention. Sustainable real estate and green infrastructure projects are also seeing increased investment as communities and governments push for lower emissions and resource conservation.
• Investors are watching trends in regulatory standards and reporting requirements, which are raising the bar for transparency and accountability in ESG strategies.

Why ESG-Aligned Investments Matter for Investors

• Values-Based Approach: Investors can align their portfolios with their own beliefs—supporting clean energy, ethical business practices, or fair labor standards.
• Potential for Long-Term Growth: Many ESG funds and assets have shown steady performance, as demand for sustainable solutions grows and companies adapt to new expectations.
• Risk Management: Focusing on companies with strong governance and responsible practices may help reduce exposure to controversies, regulatory penalties, or environmental costs.
• Broader Access: ESG opportunities now include mutual funds, exchange-traded funds (ETFs), direct investments in green projects, and even sustainable property funds.

What to Consider

• ESG definitions and standards can vary between funds and regions, so it’s important to review each investment’s approach to environmental, social, and governance issues.
• Data quality and reporting are improving, but careful research is needed to ensure that investments truly reflect ESG principles.

In 2025, ESG-aligned investments offer a way to help build a portfolio that supports your financial goals while also reflecting your values. With expanding opportunities across industries and strong market growth, ESG strategies remain at the center of many investors’ plans for the future.

Infrastructure Investments

Infrastructure remains one of the most practical ways to participate in the backbone of a growing economy. When you invest in infrastructure, you’re backing the construction, maintenance, and upgrade of essential systems—roads, bridges, airports, ports, power grids, renewable energy installations, water facilities, and digital networks.

As governments and private companies pour capital into these projects, infrastructure investing has moved to the forefront for people seeking alternative investments with a long-term outlook.

Unprecedented Spending and Demand

The global need for infrastructure is massive. Worldwide, annual spending on infrastructure is projected to exceed $9 trillion in 2025, as cities and countries address aging systems, population growth, and shifts toward cleaner energy. In the United States alone, engineers estimate that about $9.1 trillion will be needed over the next decade to modernize highways, transit systems, energy grids, and water facilities (more on infrastructure funding needs).

Growth in Private Investment

Private capital is playing a larger role than ever before. In the first quarter of 2025, private infrastructure fundraising reached nearly $48 billion, one of the strongest showings in recent years (infrastructure fundraising trends). Globally, over $335 billion in available capital is ready to be deployed into new and existing projects, ranging from renewable energy to data centers and broadband expansion.

Resilient Performance and Inflation Protection

Infrastructure investments are known for steady, contract-based cash flows. In fact, private infrastructure funds delivered average annual returns above 11% over the past several years, with many projects linked to inflation or GDP growth. This makes infrastructure appealing to investors who want income that can keep up with rising costs, while also helping to buffer a portfolio from the swings of public stock markets.

Megatrends Driving Opportunity

Several structural shifts are making infrastructure even more attractive in 2025:

• Digital transformation: The explosion in data, cloud computing, and artificial intelligence is creating sustained demand for data centers, cell towers, and broadband networks.
• Renewable energy: As countries push for lower carbon emissions, investment in wind, solar, and storage projects is accelerating.
• Urbanization: More people moving into cities is increasing the need for efficient transport, clean water, and reliable energy.

Broader Access for Investors

Traditionally, infrastructure was the domain of institutional investors. Today, more funds and investment vehicles are opening access to individuals. You can participate through infrastructure-focused funds, ETFs, private placements, or in some cases, public-private partnerships.

What to Watch Before You Invest

• Liquidity: Infrastructure investments often involve locking in your capital for several years, as projects may take time to complete and reach full profitability.
• Sector and Geographic Focus: Risk and return can vary widely between regions and types of infrastructure. Diversification across sectors—such as transport, utilities, and digital—can help manage risk.
• Regulatory and Political Risk: Government policies, regulations, and even elections can impact how infrastructure projects perform. It’s important to understand the operating environment of any project or fund.

Why Infrastructure Stands Out in 2025

If you’re looking for alternative investments with the potential for steady income, inflation protection, and exposure to big-picture trends, infrastructure deserves a closer look. The combination of massive spending needs, strong private investment, and long-term societal shifts means this asset class is likely to remain central to diversified portfolios for years to come.

Commodities

Commodities remain a cornerstone of alternative investments, valued for their ability to diversify portfolios and help manage risk when markets become unpredictable. Gold, silver, oil, natural gas, and agricultural products are among the best-known assets in this group, each bringing its own set of opportunities and challenges.

Why Commodities Matter for Investors

• Inflation Hedge: Commodities often respond directly to changes in inflation. When the cost of living rises, prices for physical goods such as gold, oil, and grains may also climb, offering a way to help protect your purchasing power.
• Diversification: Commodities have a track record of moving independently from stocks and bonds. This non-correlation can help smooth out returns and reduce the impact of volatility in other parts of your portfolio.
• Global Demand: As economies around the world grow, so does the demand for energy, metals, and agricultural products. This steady need helps support long-term opportunities in the commodity space.

Key Trends and Data in 2025

• Gold and Silver: Precious metals have held their value as traditional safe havens. In recent years, gold prices have reached record highs during periods of inflation and global uncertainty. Silver often tracks gold but can also benefit from demand in technology and clean energy sectors.
• Oil and Energy: Oil prices remain sensitive to supply disruptions and geopolitical factors. In 2025, continued investment in renewables and shifting energy policies are also influencing traditional energy markets, with volatility creating both risks and rewards for investors.
• Agriculture: Weather patterns, trade policies, and changing diets keep agricultural commodities in focus. As populations grow and food security becomes a priority, markets for grains, soybeans, and other staples are expected to remain active.

How to Invest in Commodities

• You can gain exposure through direct ownership (like buying physical gold), commodity-focused mutual funds or ETFs, futures contracts, or participation in agricultural partnerships.
• Each approach comes with its own level of risk, liquidity, and experience required, so it’s important to match your investment method with your goals and comfort with complexity.

What to Watch Out For

• Volatility: Prices can swing sharply in response to supply shocks, political changes, or unexpected events.
• Storage and Logistics: Physical commodities often involve extra costs for storage and insurance.
• Market Knowledge: Understanding how different commodities react to economic conditions, policy shifts, and supply-demand changes is key.

If you’re seeking ways to balance your portfolio, hedge against inflation, or tap into global trends, commodities can offer an effective alternative investment option in 2025. As always, think about your risk comfort and long-term objectives before adding them to your strategy.

Trends to Watch in 2025

Alternative investments are evolving quickly. If you’re considering new ways to diversify your portfolio, here are some of the most important trends shaping the space in 2025:

Fractional Ownership

Fractional ownership allows you to buy a piece of assets that were once reserved for institutional investors or high-net-worth individuals. Instead of purchasing an entire building, artwork, or business, you can now invest in just a portion. This lowers the barrier to entry and gives you access to real estate, fine art, private equity, and even collectible markets without committing large amounts of capital. It’s changing who can participate in alternatives and how diversified a portfolio can become.

Tokenization and Blockchain Technology

Tokenization is reshaping how assets are bought, sold, and traded. By representing ownership through digital tokens on a blockchain, investments can be transferred more efficiently and securely. This approach brings new levels of liquidity to traditionally illiquid assets, such as real estate, art, or private company shares. Blockchain technology also helps automate transactions and track ownership with transparency, reducing the need for intermediaries.

Growth of Digital Platforms and Fintech

Digital platforms are making it easier to find, evaluate, and manage alternative investments. From online real estate marketplaces to platforms focused on private credit or art, technology is lowering costs and providing tools for research, reporting, and communication. Fintech solutions are also improving access, so you can invest smaller amounts and manage your holdings with greater flexibility and control.

Transparency and Due Diligence

With more platforms and products available, transparency has become a top priority. Investors now have more access to reporting, performance data, and detailed disclosures than ever before. This helps you make more informed decisions and compare opportunities across providers. Due diligence tools are becoming more sophisticated, making it easier to evaluate the risks, costs, and structures involved in alternative investments.

Sustainable and Impact-Focused Investing

Interest in sustainable investing continues to climb. More people want to align their portfolios with their values, supporting environmental, social, and governance (ESG) initiatives or funding projects that generate a measurable positive impact. Whether it’s green energy, affordable housing, or community-focused funds, there are more options available to help you invest with a purpose while still pursuing financial goals.

Access for a Wider Audience

The combination of fractional ownership, tokenization, and digital platforms is broadening access to alternatives. Individuals who were previously unable to participate due to high minimums or complex structures can now get involved, often with just a few clicks.

Risks and Things to Watch Out For

Alternative investments offer new ways to diversify, but they come with risks that are different from traditional assets. Understanding these risks—and how they might fit with your goals—can help you make smarter choices. Here’s what to keep in mind:

Liquidity Constraints

Many alternative assets, such as real estate, private equity, or private credit, are not easily sold. You may have to hold your investment for several years before you can access your funds. Unlike stocks or bonds, there may be limited or no secondary market to sell when you want.

Valuation Challenges

It’s not always easy to determine the current value of some alternatives. Assets like private businesses, art, or certain collectibles can be difficult to appraise accurately. Their value may only be clear when a sale actually takes place, which makes it harder to monitor performance or adjust your portfolio quickly.

Complex Structures and Costs

Many alternative investments involve more complex structures and fee arrangements than traditional funds or securities. This can include performance fees, management costs, or partnership agreements. Make sure you fully understand how fees are charged and how they might affect your returns over time.

Regulatory Uncertainty

Some areas—especially cryptocurrency, peer-to-peer lending, and tokenized assets—are subject to evolving regulations. Rules can change quickly, and unclear guidelines may add an extra layer of risk. It’s important to stay updated and only invest through reputable platforms.

Potential for Scams and Fraud

With more products and platforms available, the risk of encountering scams or fraudulent schemes has grown. Be cautious of offers that sound too good to be true, promise unusually high returns, or lack transparency. Research the background of any provider or opportunity before committing your money.

Market and Economic Risks

Alternative assets can still be affected by broader economic shifts. Changes in interest rates, inflation, or market demand can impact values, cash flow, and exit opportunities—sometimes in unexpected ways.

Know Your Own Risk Tolerance

Not every alternative investment is a good fit for every investor. Be honest about your time horizon, liquidity needs, and how much volatility you’re comfortable with. It’s often helpful to talk with a financial advisor who understands alternative investments and can help you find options that match your overall plan.

Wrapping up

If you’re thinking about adding alternative investments to your strategy in 2025, it all starts with your own goals and comfort with risk. Take some time to review where you are financially and what you want to achieve—whether it’s income, growth, or better diversification.

Consider how much of your portfolio you’re willing to allocate to alternative assets. Each type—real estate, private credit, commodities, and more—comes with its own set of opportunities and risks. The key is understanding what fits your timeline and how each choice could impact your broader plan.

It’s important to learn about the options available, ask questions, and be clear about fees and liquidity terms. Seek out reputable providers and don’t rush the process. If you’re unsure, having a conversation with a financial advisor who understands alternative investments can help you build a strategy that’s tailored to your situation.

By staying informed and taking a thoughtful approach, you give yourself the chance to find new opportunities and shape a portfolio that’s ready for what’s next—no matter where the markets go.