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Common Types of Alternative Investments

An investment made in asset classes that aren’t stocks, bonds, or cash are considered alternative investments. Not all investors are a good fit for alternative investments, and there are many types of alternative investments for investors to choose from.

Unfortunately, just because your stockbroker recommends alternative investments doesn’t mean they’re the right option for you and your investment goals. In fact, alternative investments can be very high risk. 

If your broker’s negligence or misconduct surrounding your investment in alternative investments caused you to suffer a considerable loss, you may be able to get justice through arbitration before the Financial Industry Regulatory Authority (FINRA). 

Continue reading to learn more about some of the more common types of alternative investments where investors have been known to endure losses and what an investment loss lawyer can do to help.

Venture Capital

Private equity financing is provided to emerging companies with high expected growth potential and startups, usually by venture capital funds or firms. Risks of venture capital include liquidity constraints and losing the value of their capital investment. 

Real Estate

Real estate is the largest asset class in the world and can be particularly complex. This is partially because property owners are often dependent on tenants for cash flow. This is similar to how bonds work. Risks of real estate investing include lack of liquidity and the unpredictability of the real estate markets. 

Hedge Funds

Hedge funds are pooled investment funds. They usually trade in assets that are liquid and they are able to engage in more complex trading strategies such as utilization of derivatives and short selling. 

Some of the risks associated with hedge funds include equity and currency risk, as well as illiquidity, because hedge funds often require you to keep your investment in the fund for a minimum amount of time or face penalties. 

Real Estate Investment Trusts (REITs)

Real estate investment trusts, also called REITs, are publicly traded companies that own, finance, or in some cases operate an income-producing real estate such as hospitals, hotels, and warehouses. But as interest rates rise, the value of the REITs can decrease, making them a risky alternative investment. 

Contact a Nationwide Investment Loss Lawyer

When your broker fails to make recommendations that align with your investment objectives, you may be able to hold them accountable. If you invested in alternative investments and wound up suffering a considerable loss, you may be able to pursue a FINRA arbitration complaint against your broker. 

Meet with a reputable investment loss lawyer at Wolper Law Firm to discuss your legal options. Call our office at 800.931.8452 or fill out the convenient contact form included below to schedule your free consultation. 

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]