Whether your investment strategies focus on short-term or long-term goals, it is always a good idea to diversify and invest some money into alternative assets, writes John Csiszar for AOL Finance.

Alternative investments are nontraditional investments that go beyond the stocks, bonds, or mutual funds that are more typical for the world of investing. Putting money in alternative assets ensures that you own some real assets that do not move with the stock and bond markets.

The most important thing from the perspective of diversifying your portfolio is that the values of alternative investments does not directly correlate with stocks and bonds.

More popular alternative investments include hedge funds, precious metals, and futures.

Hedge funds can be considered mutual funds on steroids. They buy securities using investors’ money the same way mutual funds do, however the success of any hedge fund is more dependent on a manager’s skill than the markets’ overall performance.

Advantages include fewer regulations and restrictions than mutual funds and the ability to buy nearly any investment they want. Disadvantages for investors include a lack of knowledge of what the fund owns and limited access to funds.

Precious metals such as gold and silver are also popular alternative investments.

In the pros category, they are often regarded as a hedge against inflation shocks and they do not directly correlate with stock and bond markets.

On the other hand, precious metals do not pay dividends or return capital and offer weak long-term returns in comparison with the stock market.

Futures are contracts where it is agreed between buyers and sellers to exchange an asset at a specified price in the future.

These can hedge your investments as you only put up a portion of your investment due to the leverage and margin requirements.

However, futures are also speculative and you can end up losing more money than initially invested.

Fred Hubler CEO and Chief Wealth Strategist for Creative Capital Wealth Managment Group built a firm around alternative investments. “Alternative investments are a mystery to most people that’s why we built a free educational website to help our clients and their friends understand the different types of alternative investments. I would recommend anyone who is interested to go to www.got-alts.com and poke around.”

Learn more about alternative investments in AOL Finance.

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