A recent survey conducted by Alto, a self-directed IRA platform, reveals a growing interest in alternative investments such as real estate, cryptocurrency, and art. Despite a lack of knowledge among Americans about alternative investing, the survey found that 20% of respondents were familiar with these investment options.
According to Eric Satz, the founder and CEO of Alto, there has been a shift in the investment landscape, with retail investors now gaining access to quality investments outside of traditional vehicles. Satz highlights the rise of a 40/30/30 portfolio approach, which includes 40% public equities, 30% fixed income, and 30% alternative investments like private credit, real estate, and crypto markets.
Crypto emerges as one of the most favored alternative investments, driven by recent approvals of spot Bitcoin exchange-traded funds (ETFs). Satz suggests that Americans are exploring new ways to diversify their portfolios, and the future promise of crypto continues to excite investors despite its volatility.
Real estate also garners significant interest as an accessible investment option for all investors, regardless of accreditation status. Satz notes that real estate offers attractive risk/reward profiles, especially when leveraged through debt or mortgages.
Art, although trailing behind crypto and real estate, is seen as a hedge against economic downturns and offers potential uncorrelated returns. Satz highlights the growing accessibility of collectible art through technology and fractionalized ownership scenarios.
The survey reveals that lack of education and familiarity are the main barriers to investing in alternative assets. However, 44% of investors remain confident in the stock market for retirement income, while 39% expect alternative assets to outperform the market in the next five years.
Overall, the survey indicates a growing optimism in alternative investments, driven by their historical outperformance and the democratization of access to these asset classes.
