Understanding The Pros And Cons Of Alternative Investments

In today’s dynamic market environment, some investors may be looking beyond stocks andbonds for other options for investing their money. This search for other options may lead toalternative investments.

Alternative investments are investments outside the stock and bond markets, and may includereal estate, private equity, hedge funds, digital assets, and may include investments offering tothese financial instruments such as cryptocurrencies, commodities, precious metals and art orcollectibles. These types of investments tend not to be correlated to the performance of stocksand bonds, and may offer the potential for higher returns, but typically with higher risk.

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Are Roth 401(k)s Still a Good Deal? When to Use Them—and When to Pass

Sometimes it's better to get taxes out of the way earlier when using a 401(k) to save for retirement.

  • Converting from a traditional IRA to a Roth IRA is a taxable event.
  • To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least 5 tax years, and the distribution must take place after age 59 1/2 or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.


Financial planner David Born advises a couple in the top tax bracket who contribute to Roth 401(k)s rather than traditional 401(k)s, even though it means they pay more in taxes now.

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