It is all too easy to get into a comfort zone and limit your financial exposure to the usual traditional fixed income and equity assets that the average investor will probably be holding as well.

Variety is the spice of life, so if you believe that saying, you should consider looking at alternative investments as a way of potentially bringing some significant benefits to your investment portfolio.

Not just for the super-rich

Just as forex trading and playing the stock market has become accessible to many of us, alternative assets are definitely no longer the exclusive preserve of the super-rich investor.

Alternative assets should not be classified as a direct fixed-income or equity investment such as residential property. An example of an alternative asset is something like a commodity futures contract for gold or maybe wheat or pork bellies.

There are also quite a diverse range of alternative assets strategies now available to investors through traditional vehicles such as Exchange-traded funds (ETFs), mutual funds and exchange-traded notes (ETN’s).

Lower entry point

The traditional view is that alternative assets are only applicable to high net worth individuals who have the level of funds and resources to speculate with some of their capital in illiquid secondary markets.

The evolution of more diverse and accessible global financial markets has led to a greater volume and depth of products available, giving average investors the chance to join in the alternative investment action by adding these alternative assets to their portfolios.

You will find that mutual funds, ETF’s and ETN’s all offer the opportunity in varying degrees, to directional alternative assets such as commodities, commercial property and foreign currencies. You can even gain access to certain hedge-fund strategies like buy-write .

Absolute return funds

One strategy that you might consider is to invest in an absolute return fund.

This term actually covers a variety of different strategies and the aim of the fund is to produce a positive return irrespective of which way the market is heading. It would seem to be an easy decision to make to invest in a fund that promises a positive return on your investment whichever direction the market is moving in, but it is never that simple.

These funds often employ complex strategies and they definitely do not guarantee to produce a positive return each year. Some of these funds invest in equity-based investments and others are focused solely on the bond markets, whilst others try to employ a mix of the two.

The purpose of an absolute return fund is that it offers the chance for shorting in a falling market or buying in a rising market, which is essentially hedging, but with a greater degree of transparency.

The main point to remember is that now that alternative assets are available to many of us, there is an opportunity to perk up our investment portfolio and even out the sometimes bumpy road that comes from investing in a single asset class.

Abbie Peacock is always on the lookout for way to diversify her portfolio. When she finds them, she likes to share them by writing about them online. Look for her interesting and informative posts on various websites and blog sites online.