Why Alternatives May Belong in a Modern Portfolio
2025 has already tested investors’ emotional endurance.
From rate shocks to geopolitical tensions, the markets have been riding a wave of unpredictability. And if you’ve been watching your portfolio closely, you’re likely feeling that turbulence in real time. One metric that reflects this instability is the VIX—often called the “fear index”—which has repeatedly spiked this year as investor sentiment swings between optimism and uncertainty.
Volatility, in itself, isn’t unusual. But the constant visibility we now have—apps, alerts, and daily headlines—means that even normal market movements can trigger emotional reactions. That can lead to hesitation, second-guessing, or reactive decision-making. And over time, those decisions can add up in ways that erode long-term wealth.
That’s where alternative investments come in—not just as a financial strategy, but as a psychological one.
The Hidden Power of Not Knowing (Every Single Day)
One of the more subtle but powerful features of alternative investments is that they are not priced daily. That means you don’t see the constant fluctuations the way you do with stocks or mutual funds. While these assets still carry risk—and require a long-term perspective—they remove the day-to-day noise that often fuels emotional decision-making.
In our experience, clients with alternatives in their portfolio often feel more grounded, even when the broader market feels chaotic. And that matters.
Because investing well isn’t just about data—it’s about behavior. And the more stability you can build into your investment experience, the more likely you are to stay the course and reach your goals.
Is It Time to Rethink the 60/40 Portfolio?
The traditional 60/40 portfolio—60% stocks, 40% bonds—has been a cornerstone of investment strategy for decades. But many industry leaders are now questioning whether that model still makes sense in today’s environment.
In his 2025 annual letter, Larry Fink, CEO of BlackRock, proposed a new structure: the 50/30/20 portfolio, allocating 20% to private assets. These include:
Private credit
Private real estate
Infrastructure (e.g., ports, power grids, data centers)
Venture-backed private companies
Other institutional-grade alternative strategies
Fink noted that many of the assets that will “define the future” are no longer accessible through public markets. BlackRock itself has committed over $600 billion to alternatives and is building platforms to give broader access to advisors and clients.
What Are the Potential Benefits of Alternatives?
Every investment has risks, and alternatives are no exception. They are often less liquid, may require longer holding periods, and can be more complex to understand. That said, here are a few reasons they’re gaining attention:
🧩 Diversification
Alternatives often have a low correlation to stocks and bonds, which can improve portfolio balance and risk-adjusted returns.
🔐 Inflation Sensitivity
Some real assets, like real estate or infrastructure, have income streams or valuations that may respond more favorably during inflationary periods.
📉 Reduced Volatility Exposure
By not being priced daily, these investments may create a less reactive investor experience, even if their underlying value still fluctuates over time.
📈 Long-Term Return Potential
Some investors pursue alternatives for the potential of higher returns, especially as part of a long-term, well-diversified strategy.
Should You Consider Alternatives?
Not every investor needs to—or should—invest in alternatives. But for those seeking a more stable experience, broader diversification, and alignment with long-term goals, these strategies are worth exploring.
At Axiom Wealth Solutions, we take a highly personalized approach. We help our clients understand the risks, rewards, and mechanics of alternative investments within the full context of their plan. We're not here to chase trends—we're here to build lasting, intentional financial strategies.
Want to explore what’s possible for your portfolio?
Schedule a call with me to discuss whether adding alternatives might bring more balance to your investment journey.