Foundations of Alternative Investments

For most of the twentieth century, a balanced portfolio meant stocks and bonds. Today, institutional investors and increasingly individual investors look beyond these two asset classes to a wider universe of alternatives — each with distinct return drivers, liquidity characteristics, and risk profiles. Understanding what alternatives are and how they behave is the prerequisite for deciding whether they belong in your portfolio. By the end of this course you will be able to describe the defining features of the major alternative asset classes, explain how each generates returns and what risks each carries, and articulate the role alternatives can play in a diversified portfolio. What you will learn: - What defines an alternative investment and how alternatives differ from traditional stocks and bonds - Real estate: direct ownership, REITs, and how property generates income and appreciation - Commodities: physical goods as financial instruments, commodity futures, and inflation-hedging properties - Private equity: buyouts, growth equity, and why private company investment differs from public market investing - Cryptocurrency and digital assets: how they differ from other alternatives and their unique risk characteristics - Correlation properties: how alternatives relate to traditional assets across different market environments - Liquidity considerations: why many alternatives are illiquid and how that affects portfolio construction - How institutional investors — endowments, pension funds — allocate to alternatives and why The course is structured as a series of asset-class readings, each covering the mechanism of returns, key risks, and typical investor use case. Case studies examine real allocations to alternatives in different portfolio contexts. Self-assessment exercises test your ability to compare alternatives on key dimensions before advancing. This course is designed for individual investors, finance students, and wealth management professionals who are new to alternative asset classes. No prior investment experience is required beyond basic familiarity with stocks and bonds. This content is purely educational and informational; it does not constitute financial advice and is not a recommendation to invest in any specific asset class.