Visual Guide to Financial Markets

Hard Assets

All the investments we have examined so far fit into one of three categories: stocks, bonds, and cash. Investors also can pick from a number of alternative investments, or strategies and assets other than buying stocks and bonds or holding onto cash.

Alternative can refer to hedge funds, or private partnerships that rely on investment strategies besides buying and holding securities. Private-equity funds, which acquire entire companies mainly with borrowed money, are another alternative.

We’ll take a closer look at these funds and others later. For the moment, we’ll focus on alternative assets. Commodities and real estate are two ...