Benchmarking alternatives isn't easy, but it's critical in making sure clients and advisors are clear on the investments' role in the portfolio. Here's how to benchmark private equity, non-traditional bonds and long-short funds.

First, let me fess up that both Wall Street Journal columnist Jason Zweig -- who I spoke with about advisors' use of alternatives for clients -- and I had a very difficult time in coming up with appropriate benchmarks, so the ones that I suggest are subjective. But the more important objective is having advisors identify the benchmark to the client ahead of time to evaluate its performance.

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