5 Myths About Alternative Investments—Debunked

Alternative investments have exploded in popularity, with platforms like Fundrise, Masterworks, and Yieldstreet making them more accessible than ever. But despite their growing appeal, a handful of stubborn alternative investment myths still discourage many investors from exploring them.

In this post, we’ll tackle five of the most common misconceptions about alternative investments—and explain why they’re often misunderstood.

Myth #1: Alternative Investments Are Too Risky

Reality: All investments carry risk—including stocks and bonds.

The myth that alternatives are inherently riskier comes from their historical association with hedge funds and private equity. But today’s alternatives include a wide spectrum of options, from real estate and farmland to art and litigation finance. Many of these assets have lower correlation to public markets, meaning they can actually diversify your portfolio and reduce overall risk.

▶️ Pro Tip: Use platforms that provide transparent performance data and investor protections to mitigate risk.

Myth #2: They’re Only for the Ultra-Wealthy

Reality: Accredited investors used to dominate the space, but that’s changing.

Thanks to regulation changes and fintech innovation, retail investors now have access to many alternative asset classes. Some platforms let you get started with as little as $10 to $500.

At AltsVesting, we highlight platforms that are open to everyday investors, including self-directed IRA options for retirement investing.

Myth #3: Alternatives Are Always Illiquid

Reality: While some are long-term plays, others offer regular liquidity windows—or even daily redemptions.

It’s true that some private investments (like VC or real estate syndications) can tie up capital for years. But many platforms now offer quarterly liquidity, secondary markets, or shorter lock-up periods.

▶️ Example: Fundrise’s real estate funds offer quarterly liquidity plans, and Masterworks allows investors to sell shares on a secondary market.

Myth #4: They’re Too Complicated for the Average Investor

Reality: Alternative investing can be complex—but so is crypto, options trading, and even tax-loss harvesting.

The key is education and transparency. Many modern platforms are focused on user experience, providing detailed offering pages, FAQs, risk disclosures, and performance reports. And sites like AltsVesting break it all down into plain English through due diligence reports and platform reviews.

You don’t need a finance degree—just the right guidance.

Myth #5: There’s No Place for Alternatives in a Retirement Portfolio

Reality: Alternatives can play a powerful role in long-term retirement planning.

Self-directed IRAs and solo 401(k)s allow investors to hold alternative assets in tax-advantaged retirement accounts. This means you can invest in real estate, private credit, startups, and more—while growing your wealth tax-deferred or tax-free.

▶️ Related Reading: The Ultimate Guide to Alternative Investments

Final Thoughts

Don’t let outdated alternative investment myths keep you on the sidelines. With the right platform, due diligence, and long-term mindset, alternative assets can be a smart and strategic part of your portfolio.

At AltsVesting, we’re here to help you cut through the noise with deep dives, platform reviews, and educational tools. Subscribe to our newsletter to stay ahead of the curve.