# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Alternative Asset

Written By
Paul Tracy
Updated January 22, 2021

What is an Alternative Asset?

An alternative asset is an item that has intrinsic value, but is not traditionally considered a financial asset.

How Does an Alternative Asset Work?

Alternative assets are best defined by their absence from the capital markets. Their valuation is subjective and based primarily on popular demand. Classic examples of alternative assets include works of art, antiques, collectors' items and coins.

Why Does an Alternative Asset Matter?

Alternative assets are a useful diversification tool. Unaffected by movements in the capital markets, their values generally grow over long periods of time. This means that they are characterized by low liquidity. This, combined with the subjective nature of their valuation, makes them difficult to incorporate as part of a traditional investment portfolio.

Alternative assets can be a great hedge for investors heavily involved in the stock markets since they're not tied to Wall Street's ups and downs. 

Ask an Expert about Alternative Asset
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Alternative Asset.
Be the first to ask a question

If you have a question about Alternative Asset, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Alternative Asset, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Alternative Asset

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms