• Smart Cash
  • Log in
  • Get Started

Table of Contents

What are alternative investments?

7 types of alternative investments

How are alternative investments regulated? 

Potential benefits and risks of alternative investments

What to consider before making alternative investments 

The bottom line

LearnAlternative InvestmentsWhat Are Alternative Investments? 7 Common Types

What Are Alternative Investments? 7 Common Types

Oct 18, 2022


6 min read

Learn how investors can use various asset classes to diversify their portfolios and take advantage of less common, but potentially profitable, opportunities.

Many new investors start with the basics: buying publicly traded stocks and bonds, or holding cash in savings accounts. They may also purchase mutual funds or exchange-traded funds (ETFs), though these funds are often made up of these securities as well. Investors who are looking for other ways to earn returns on their money can turn to alternative investments in addition to—or instead of—the standard options. 

What are alternative investments?

Alternative investments are investment types that don’t fall within the traditional asset classes of stocks, bonds, or cash. They can encompass a wide range of investments and are generally a little more difficult to buy or sell because of regulatory restrictions, their cost, or limited availability. Still, understanding and potentially purchasing alternative investments could be a way to build a diversified portfolio

7 types of alternative investments

Alternative investments can include specific types of assets, along with investment strategies that take a non-traditional approach. Some popular options include:

  1. Cryptocurrencies


are digital assets that may function similar to a commodity, currency, or stock. Although Bitcoin and Ethereum are two of the best known cryptos, there are thousands of others, known as alt coins. Cryptos have also become a mainstream investment for everyday investors. Morning Consult, a business intelligence company, found that slightly more U.S. adults own crypto than a certificate of deposit (CD), a type of savings account. 

  1. Real estate

One relatively common type of alternative investment is real estate. Some people own and rent out homes, apartments, or storefronts to generate income. Investors can also invest in residential or commercial real estate in indirect ways, such as by purchasing shares in a real estate investment trust (REIT), which can either be private or trade on a stock exchange. 

  1. Collectibles

Collectibles can include various physical and digital products that may increase in value over time. Investors can buy and store rare coins, stamps, trading cards, antiques, art, and wine as a potential way to make money. 

  1. Commodities


can include natural resources, farmland, and forests. Investors may purchase natural resources such as oil, corn, gold, usually by using futures, options, or swaps—securities based on the value of other securities or assets—rather than purchasing and holding the physical commodities. Investments in farmland and forests are a bit different because they can be long-term investments that provide an income stream to investors.

  1. Private businesses

Unlike with public companies, investors can’t simply buy and sell stock in a private business. However, people can invest in private businesses in other ways, like angel investing. These investments may be riskier than purchasing shares in a large and stable public company that must abide by regulations and rules of disclosure. But they may also lead to big returns if the company prospers. 

  1. Private credit

Some investors lend to businesses and make money on the interest payments. Large institutional investors may put money into private credit funds that make various types of business loans, including risky ones with high interest rates to companies that are in bad shape and can’t get financing from banks. Individual investors may be able to make loans through crowdfunding or peer-to-peer loan marketplaces, or buy buying into a fund that offers private credit.

  1. Hedge funds

Hedge funds

are a type of alternative investment that invest money on behalf of wealthy individuals and institutions in exchange for a fee and a cut of the profits. Professional investors develop and implement various strategies, and different hedge funds may have different goals or approaches. 

Try Titan’s free Investment Calculator to project your potential investment returns.

Learn More

How are alternative investments regulated? 

There’s no single approach to regulating alternative investments because they include a wide variety of assets that may fall under different regulators’ purview. 

For example, the Commodity Futures Trading Commission (CFTC) regulates the sale of commodities and related futures, options, and swaps, while the Securities and Exchange Commission (SEC) helps oversee federal securities laws and investments in securities.

Sometimes, this makes for clear and straightforward regulations. For instance, companies that want to sell securities, such as stock, to investors must register with the SEC when they do an initial public offering or a secondary offering. Registering requires detailed financial disclosures and reporting on the company’s business.

Other companies, usually those that are private, can get exemptions for these requirements in several ways. One way is by selling investments to accredited investors—wealthy or knowledgeable investors who may be better suited to investing in private companies that haven’t disclosed as much information as public companies. 

However, regulations and protections on alternative investments aren’t always clear, or even exist. Some collectibles, such as trading cards, aren’t regulated by federal authorities and it’s up to marketplaces and individuals to create and enforce rules. Or, with new investments, like cryptocurrencies, there are still unanswered questions about how cryptos are classified (as a commodity or security) and which regulations apply. 

Regardless of the formal regulations, investors need to be conscious of scams. Because fraudsters are already acting illegally, they may also falsely claim to be complying with the law and/or offer guaranteed returns. 

Potential benefits and risks of alternative investments

As with any type of investment, there are potential benefits and risks to alternative investments. 

Potential benefits of alternative investments

  • Diversification.

    Alternative investing may help diversify a portfolio by introducing assets that don’t closely correlate with the rise and fall of stock or bond prices.

  • May offer high returns.

    While there are no guarantees, some alternative investments may offer large returns or a steady income stream. 

  • Monetize expertise.

    Investors who have particular knowledge in a subject, such as wine or their local real estate market, may be able to use alternative investments to profit from that knowledge. 

Risks of alternative investments

  • Can be difficult to understand.

    Some alternative assets may be complex and difficult to understand, which could make it harder to detect a scam or understand the related risks. 

  • Fewer regulations.

    Alternative assets may be subject to fewer (or no) regulations compared to traditional assets. The lack of consumer protections and regulations could make them a riskier option for less sophisticated investors. 

  • Higher fees.

    Because it can be more difficult to buy and sell alternative investments, market makers and investment advisors may charge higher fees than on traditional investments. In turn, these can eat into investors’ overall returns. 

  • High minimums.

    The minimum investment required to get into the public market can be as low as the price of a single share of stock. Alternative investments may require more money—for example, to invest in real property, you might need tens of thousands of dollars for a down payment. 

What to consider before making alternative investments 

Investors may want to ask themselves a few questions before putting their money on the line with an alternative investment:

  • How will this investment improve my overall portfolio?
  • How much risk am I taking on and what are my target returns?
  • Why am I choosing this investment over another?
  • Do I trust the person or marketplace selling me the investment?
  • Can I verify the seller’s claims about the investment’s authenticity and potential returns?

Additional questions and due diligence may be warranted depending on the asset type, specific investment, and investor’s experience in the market. 

The bottom line

While many people think of publicly traded stocks, bonds, and savings when investing, these traditional investments aren’t the only options. Alternative investments include both long-trusted and brand-new options, such as real estate and cryptos. Investors can use these various asset classes to diversify their portfolios and take advantage of less common, but potentially profitable, opportunities.

At Titan, we are value investors: we aim to manage our portfolios with a steady focus on fundamentals and an eye on massive long-term growth potential. Investing with Titan is easy, transparent, and effective.

Get started today.


Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Titan has not independently verified such information and makes no representations about the accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; Titan has not reviewed such advertisements and does not endorse any advertising content contained therein.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any strategy managed by Titan. Any investments referred to, or described are not representative of all investments in strategies managed by Titan, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see Titan’s Legal Page for additional important information.

Three Things, a newsletter from Titan

Stay informed on the most impactful business and financial news with analysis from our team.

Cash Management

Smart Cash

Smart Cash FAQs

Cash Options

Get Smart Cash


© Copyright 2023 Titan Global Capital Management USA LLC. All Rights Reserved.

Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept and agree to Titan’s Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings and other information provided are for illustrative purposes only and are not to be considered investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Please refer to Titan's Program Brochure for important additional information. Certain investments are not suitable for all investors. Before investing, you should consider your investment objectives and any fees charged by Titan. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested, including principal. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA/SIPC. For more information, visit our disclosures page. You may check the background of these firms by visiting FINRA's BrokerCheck.

Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. Before investing in such Third Party Funds you should consult the specific supplemental information available for each product. Please refer to Titan's Program Brochure for important additional information. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.

The cash sweep program is made available in coordination with Apex Clearing Corporation through Titan Global Technologies LLC. Please visit www.titan.com/legal for applicable terms and conditions and important disclosures.

Cryptocurrency advisory services are provided by Titan. Cryptocurrency trading is provided by Bakkt Crypto Solutions LLC ("Bakkt Crypto"). Bakkt Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Bakkt Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency execution services are provided by Bakkt Crypto (NMLS ID 1828849) through a software licensing agreement between Bakkt Crypto and Titan. Please ensure that you fully understand the risks involved before trading: bakkt.com/disclosures.

Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.

Contact Titan at support@titan.com. 508 LaGuardia Place NY, NY 10012.