Alternative investments are any investment outside of the traditional categories or strategies of stocks, bonds, most mutual funds, and cash equivalents such as certificates of deposit.  Alternatives can include hedge funds, private equity, venture capital, commodities, limited partnerships, exchange funds, managed futures, and direct real estate.
 
By their nature, alternative investments tend to be riskier than traditional investments or investment vehicles. Before investing in them you should understand them, be comfortable with them, and make sure they are appropriate for your situation. Their key benefit is diversification. The patterns of returns in these investment categories typically don't correlate with those of stocks and bonds, and hence their presence in a portfolio can dampen volatility while at the same time potentially improving overall return. 
 
Scott & Stringfellow offers the following:

• Hedge Fund-of-Funds (offered by Private Advisors, Old Mutual 2100)
• Managed Futures Funds (offered by Campbell & Co., Everest Partners, Mt. Lucas Management, Kenmar, Aspen)
• Non-traded Real Estate Investment Trust (Dividend Capital)

Although these and other similar alternative investments can provide benefits to many portfolios, they are not without their risks and challenges and are definitely not appropriate for all investors. Alternative investments are sold to qualified investors only by a Confidential Offering Memorandum or Prospectus. Alternative investments provide limited liquidity and include, among other things, the risks inherent in investing in securities and derivatives, using leverage and engaging in short sales. An investment in an alternative investment fund is speculative, involves substantial risk, and should not constitute a complete investment program. An alternative investment fund may be highly leveraged. The volatility of the price of its interests may involve complex tax structures and there may be delays in distributing important tax information. These funds may not be subject to the same regulatory requirements as mutual funds, and their fees and expenses may be high.This summary is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy interests in any fund. There can be no assurances that any of these objectives will be met. Alternative investments are speculative. Investors could lose some or all of their investment.