Control Your Nest Egg, but Watch for Risk

"How many people have been burned in the hands of hedge funds and private-equity funds?" he says. "People work their whole lives to build up enough money to have financial security, and then they take risk with something they don't fully understand to get a few extra percent of return. It's just not worth it."

Larsen, the financial adviser, says nontraditional investments may be right for someone who is very knowledgeable about a particular asset class or investment vehicle and its financial implications. Otherwise, the investor must be able to pay thousands of dollars in fees for asset management and consultations. Choosing one's own risky investments also requires a sharp instinct and a lot of faith.

"They're not all bad news," he says. "They're just more than most people want to get involved in."

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