This Fund Bought SpaceX. Why Did It Take a Dive?

C’mon in, everybody! The water’s fine!

That’s Wall Street’s message about liquidity, or your ability to buy and sell, if you invest in alternatives to publicly traded stocks and bonds, such as private equity, venture capital, nontraded debt and commercial real estate.

The water isn’t fine.

Mixing private with public assets, as giant asset managers are racing to do, is confusing, cumbersome and risky. This so-called democratization of alternative assets has rapidly become one of the biggest marketing pushes in the history of investing. Before you jump in, look at what’s been happening.