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Despite the continued rise of US stocks and the S&P 500 index approaching new record highs, data cited in a Moneywise report on a Goldman Sachs survey indicates that a segment of wealthy investors is increasingly turning to alternative assets, amid market volatility, rising bond yields, and economic and geopolitical concerns.
According to the survey, 39% of investors with investable assets between $1 million and $5 million are turning to alternative assets, and the percentage rises to 80% among investors who have $10 million or more .
The index’s rise does not reflect the performance of all stocks.
Despite the S&P 500 reaching record highs in recent months, the picture within the market is more complex. A report, citing Morningstar, indicated that nearly 60% of the individual stocks included in the index had fallen 20% or more from their all-time highs during August. This suggests a widening gap between the overall index performance and that of its constituent stocks, with significant price volatility persisting even as the index approaches its peaks.
Why are the wealthy turning to alternative assets?
Traditionally, an investor who wanted to reduce their exposure to stocks would turn to bonds, as in investment portfolios that adopted an approximate allocation of 60% to stocks and 40% to bonds.
However, the report points out that the relationship between stocks and bonds no longer always provides the expected protection, prompting some investors to study other asset classes in order to diversify risk.
According to the 2025 CAIS and Mercer survey, approximately 49% of advisors said they allocate more than 10% of their clients’ portfolios to alternative assets.
Gold: A tool for diversification and hedging
Gold is one of the key alternative assets discussed in the report, given its sometimes divergent behavior from stocks and bonds, and its potential use within a diversified portfolio during periods of geopolitical instability and market volatility. Historically, gold has also been viewed as a long-term inflation hedge, particularly when part of a broader strategy to hedge against rising prices.
Gold also differs from stocks in terms of its sources of risk; its value is not directly dependent on a particular company’s earnings, debt level, or competitiveness. However, this does not mean that gold is free from volatility or that it always moves inversely to stocks, as it is also affected by real interest rates, the dollar, and investor expectations. Real estate offers potential income and conditional protection against inflation.
Real estate is another alternative asset discussed in the report, as it can provide recurring rental income, along with the potential for market appreciation. Its ability to hedge against inflation depends in part on the ability to adjust rents as prices rise. Multi-unit residential properties, for example, may allow for quicker rent repricing than some other types of real estate.
However, direct real estate investment requires significant capital and includes management and maintenance costs, as well as liquidity risks and fluctuations in property prices. The report notes the emergence of platforms that allow for fractional real estate investment, enabling some investors to gain exposure to the sector without purchasing or managing an entire property themselves.
Alternative assets are not a single alternative
The concept of alternative assets encompasses a wide range of investments, which vary in terms of liquidity, risk, valuation, and nature of returns, and cannot be treated as a homogeneous category.
Gold differs from real estate, and both differ from private investments or non-traditional funds. The ease of selling an asset, its holding costs, and the transparency of its valuation all influence its role within a portfolio.
Therefore, the increased interest of wealthy investors in these assets does not necessarily mean that they are all suitable for every investor, or that increasing allocation to them will automatically reduce risk.
In summary, diversification extends beyond stocks and bonds. The data presented in the report reflects a growing interest among some high-net-worth investors in expanding their portfolios beyond traditional stocks and bonds. However, the figures describe investor trends and do not prove that alternative assets will outperform traditional markets in the future. The evaluation of any new allocation remains dependent on the nature of the asset, its cost, liquidity, risk, and its alignment with the investor’s objectives and time horizon.
