Fees, Liquidity and Risk in Alternatives
Before buying any alternative, check three things: what it costs, how fast you can get out and how its value is measured. Here is a checklist to compare alternatives with a simple index fund.
Compare against a simple benchmark
| Stock index fund | Typical private fund | Typical collectible | |
|---|---|---|---|
| Yearly cost | Often under 0.1% | About 2% plus 20% of profits | Storage and insurance |
| Getting out | Any trading day | Years, or limited withdrawals | Months, with sale fees |
| Pricing | Every second | Quarterly estimates | Only when sold |
| Minimum | One share | Often $25,000 or more | Varies widely |
General comparison; individual products vary.
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