In today’s investing landscape, many individuals are asking the question: What are the benefits of investing in alternative assets? As traditional stock and bond markets become increasingly volatile or saturated, more investors are exploring alternatives as a way to diversify their portfolios and potentially enhance returns.
At Rocket Dollar, we believe that investors deserve access to the full spectrum of investment opportunities, including those beyond Wall Street. Below, we explore the top benefits of investing in alternative assets and why they might belong in your retirement portfolio.
One of the most compelling benefits of alternative assets is their ability to diversify your portfolio. Traditional portfolios are typically built around public equities and fixed income. But when markets fluctuate, investors with concentrated exposure to these assets can suffer significant losses.
Alternative investments such as real estate, private equity, venture capital, startups, precious metals, and cryptocurrency—often have low correlation to the public markets. This means they don’t always move in tandem with stocks or bonds, helping to smooth out returns and reduce overall risk.
Alternatives open the door to opportunities that most investors never consider. From investing in farmland and early-stage companies to lending platforms and private credit, these asset classes can offer exposure to industries and innovations not available in public markets.
At Rocket Dollar, we’ve seen investors use their self-directed retirement accounts to participate in real estate syndications, angel investing, all while maintaining the tax-advantaged status of their IRA or Solo 401(k).
While alternative investments come with risk, they can also offer outsized returns when compared to traditional assets. Early investors in companies like Airbnb, Uber, or SpaceX didn’t find those opportunities on a public exchange; they got in through private investments.
By allocating a portion of your portfolio to alternatives, you may be able to capture returns that are simply not available through ETFs and mutual funds.
Certain alternative assets, such as real estate, infrastructure, and commodities, are commonly used as hedges against inflation. They tend to retain value, or even appreciate—during periods of rising prices.
In addition, many alternatives generate ongoing income. Rental properties, private debt, and dividend-paying private equity can all provide cash flow that supplements long-term growth.
With traditional investing, you’re often limited to what your brokerage or retirement account provider offers. A self-directed approach, especially within an IRA or Solo 401(k)—gives you more control over how your money is invested.
At Rocket Dollar, our clients have used their accounts to invest in assets they understand deeply, whether it’s local real estate, a business they believe in, or an emerging asset class. This level of personalization can create a more aligned and meaningful investing experience.
So, what are the benefits of investing in alternative assets? In short: diversification, access, control, and the potential for enhanced returns. While alternatives are not without risk and require careful due diligence, they offer investors powerful tools to build a resilient and personalized portfolio.
If you’re interested in unlocking these benefits through your retirement savings, Rocket Dollar makes it easy to open a self-directed IRA or Solo 401(k) that allows you to invest in what you know and believe in.