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Investing Specialists

What Role Do Alternatives Play in a Portfolio?

And just what is an alternative, anyway? Readers weigh in.

Mentioned: , , , , , , , , ,

Are alternatives a must-have for a properly diversified portfolio, or overpriced and overhyped?

Morningstar.com readers have a broad range of opinions on this question, based on their responses to my query in the Alternative Investments forum on the site. Some Discuss forum participants argued that the alternative products available to retail investors don't offer much that you can't get by building a well-diversified portfolio of conventional stocks and bonds. Others, meanwhile, think that alternatives have the potential to improve their portfolios' risk/reward profiles.

Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.