Because the term is so all-encompassing, it's often easier to define alternative assets by what they're not rather than what they are.  The group includes any asset that doesn't fit into one of the conventional categories, known as traditional investments, touched on above: cash, stocks, and bonds, as well as the mutual or exchange-traded funds (ETFs) that hold them.  It could be a physical item like a valuable bottle of wine, a piece of art, or an office building. Or something more intangible, like a derivative or an ownership stake in a private business. What alternative investments all have in common, however, and in contrast with traditional investments, is that most of them aren't regulated by the United States Securities and Exchange Commission (SEC).  Whereas traditional investments are governed by strict disclosure regulations and protections against fraud, alternative investments put the onus on the investor. If you purchase a piece of art, for example, and then determine that it's a forgery but can't track down the seller, that loss is yours to swallow.