When thinking of your investment portfolio, stock ownership is likely the first thing that comes to mind. Your bond holdings are also important, but most people focus the majority of attention on their stocks.

However, there are other asset classes that investors may hold in qualified and taxable accounts. Although these assets tend to be lumped together, they have very different characteristics.

For example, investors can buy exchange-traded funds designed to replicate hedge funds. They can buy managed-futures funds, real estate investment trusts, commodity funds or currency ETFs that take long and short positions in forward contracts. These are just a few of the ways that a growing number of retail investors can access investing strategies that were previously only available to investors with a high net worth.

But the availability of alternative investment vehicles raises a question: Just because you can use these strategies, does it mean you should?

The case for alternative investments. Bill Militello, founder of Militello Capital in Leesburg, Virginia, believes investors and their advisors should include alternative investments in their portfolios. But that inclusion requires strong client-advisor communication.

“It’s just as important for investors to have an understanding of the investments in their portfolio as it is for the advisor, as the combination of high expense and lack of transparency in some variety of alternatives can undermine the advisor-client trust. To avoid this situation, advisors need to ask the right questions regarding risk tolerance and long-term investment outlook,” he says.

Those questions center around specific planning objectives and the income necessary to achieve those objectives. “What level would your portfolio have to reach for you to become distressed? There should be an ongoing conversation and a mutual understanding between you and your advisor in terms of your investment goals and objectives,” Militello says.

Alternatives, in their various forms, add an element of diversification that can mitigate risk and smooth returns when stock or bond prices fall.

“We recommend that advisors look at all options when building portfolios for their clients, taking into account the client’s return objectives, risk tolerance and liquidity needs,” says Jonathan Gane, CEO of Fort Rock Asset Management in Portland, Oregon. His firm develops alternative investment portfolios with a particular focus on capital preservation and risk management.

In particular market environments, alternatives truly prove their worth. In the fourth quarter of 2015, stocks issued by companies based in the U.S., other developed markets and emerging markets all suffered. Fixed-income markets also had a rocky ride. However, REITs were a bright spot in many portfolios, ending the quarter in positive territory.

If, as many expect, equity markets go through a rough patch this year, alternatives may offer a respite. That’s because their performance, in many instances, is not highly correlated with stocks. In addition, alternatives can deliver actual returns, whereas cash — which many investors view as an alternative to stocks and bonds — typically doesn’t even keep up with inflation.

“Client portfolios benefit from the added diversification provided from certain alternative investments,” says Mark McComsey, chief investment officer of Beverly Hills Wealth Management in California.

“Some alternatives have the ability to perform during increased market volatility, not only adding to portfolio return but also reducing risk. The noncorrelating nature of alternatives offers potential for positive returns during down markets as well as during stable growing periods, which cash alone does not offer,” he says.

Know what you’re getting into. Investors working with a financial advisor should be sure they understand the logic behind adding alternatives to a portfolio, Gane says.

“There are many questions investors should be asking their advisors. What is the underlying liquidity of the investments? What is the liquidity of the fund? What is the fee structure? In what types of environment does the alternatives manager expect to perform?” he says.

Some advisors, seeking better returns for client portfolios, may reach beyond their areas of expertise. “The risk is that these portfolio managers are typically late to enter an asset class and late to exit, as they are unfamiliar with many of the nuances of certain products. Your advisor needs to be able to clearly articulate the purpose of each investment they have their clients in — not just the alternatives — and understand the products they use,” Gane says.

McComsey takes a similar approach, suggesting that investors ask advisors some key questions about the role of alternatives.

“Does an alternative investment correlate with my other holdings? How liquid is the investment if cash has to be raised? Is it a mutual fund structure ‘liquid alternative’ that has higher liquidity and generally lower fees — albeit with investment constraints — or a private placement, typically a hedge fund? What are the fees? Is it a fund of funds, or a specific investment style?” he says.

Militello says investors must have an understanding of their portfolio holdings that differ from the more traditional stocks and bonds. That understanding should always come back to an investor’s overall objective, whether it’s funding retirement or something else.

“The combination of high expenses and lack of transparency in some varieties of alternatives can undermine the advisor-client trust,” he says. “To avoid this situation, advisors need to ask the right questions regarding your risk tolerance and long-term investment outlook. There should be an ongoing conversation and a mutual understanding between you and your advisor in terms of your investment goals and objectives.”

More from U.S. News

8 Stocks Headed for a Fall in 2016

12 Financial Terms Every Investor Should Know

13 Stocks to Buy to Bet on China

Pros and Cons of Alternative Investments originally appeared on usnews.com