Q: What role should alternative investments play in the portfolio of a married couple in their thirties or forties looking to diversify and manage risk?
A: First off, I want to commend you for thinking beyond the usual mix of stocks and bonds. Exploring alternative investments in your thirties or forties is a smart, forward-thinking way to diversify and manage risk while building wealth.
What Are Alternative Investments, and Why Now?
Alternative investments can make a considerable impact in a well-rounded portfolio, especially at this stage of life. You’re still in your prime growth years, with enough time before retirement to take advantage of longer-horizon opportunities.
Types of Alternatives That Can Support Your Long-Term Goals
Alternative investments span a wide range of investment types, including income-generating real estate, private credit, and more growth-focused opportunities like venture capital, private equity, and cryptocurrency. Depending on your portfolio size, they might also include diversified funds in venture, growth, or hedge strategies. What these investments often share is that they don’t move in sync with the public stock market. That’s a good thing. Including assets with different behavior patterns can help reduce overall volatility and create a steadier experience during market ups and downs.
Private market investments can offer access to innovative companies and growing businesses before they go public—or instead of going public at all. Once limited to institutions and endowments, these opportunities are now being used by today’s high-earning families and professionals to complement their public holdings and position themselves for long-term success.
Know the Tradeoffs: What to Consider Before You Invest
Of course, these investments come with critical considerations: longer lock-up periods, less liquidity, and a higher entry threshold. But as your portfolio grows, it may make sense to look at diversified strategies that offer attractive returns without daily market swings. And when done thoughtfully, a blend of private investments can support both growth and income goals, depending on your needs.
The key is making sure these investments are intentionally aligned with your life stage, comfort with risk, and long-term financial goals.
Aligning Your Portfolio with Purpose
Alternatives aren’t a one-size-fits-all solution, and not every advisor works with them. If you’re exploring your options, a knowledgeable partner can help you weigh the pros and cons in a way that fits your life and goals.
Exploring alternatives can be exciting, but it’s not about chasing the latest trend. It’s about building a thoughtful, purpose-driven plan that supports your long-term vision. That’s why we take a personalized approach to private market investing, helping high-income families integrate alternatives in ways that match their goals, timelines, and comfort with risk.
If you’re thinking about adding private investments to your portfolio, we’re here to help you explore what makes sense for your goals. Schedule a consultation to get started.
Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm based in the greater Orlando area. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about them at envisionplanners.com.
This material has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.