Traditional public markets can react quickly to headlines, economic reports, and policy changes. For many investors, this creates an interest in approaches that do not move in lockstep with daily market swings. Alternative assets often follow their own rhythms, shaped by private business cycles, real asset income, or unique market conditions.
These differences can support a more balanced financial plan by adding variety to how risk and opportunity show up over time.
The goal is not to replace traditional holdings. Instead, alternatives can sit beside them and add a new dimension to a long-term strategy, giving investors additional ways to support growth, income stability, or tax awareness.
Types of Alternative Assets to Consider
Private Equity and Venture Capital
Direct investments in private companies can offer exposure to business innovation and growth that is not tied directly to public markets. These opportunities allow investors to participate in sectors or stages of development that are not available on traditional exchanges.
Real Assets: Energy, Minerals, and Precious Metals
Investments in energy partnerships, mineral rights, or precious metal programs may create income potential and can sometimes help offset the effects of inflation. These assets often move according to their own supply and demand cycles, which can add diversity to a broader portfolio.
Institutional Real Estate
Some investors prefer access to large, professionally managed real estate portfolios without taking on landlord responsibilities. Structures such as Delaware Statutory Trusts (DSTs*) allow fractional ownership of institutional properties and can be used as part of a 1031 exchange to defer capital gains on the sale of real estate.
Opportunity Zones
Opportunity Zones were introduced to encourage investment in designated communities. By placing eligible gains into qualified Opportunity Zone Funds, investors may defer recognition of those gains and participate in long-term development projects that align personal goals with community impact.
Specialized Programs
Conservation projects, exotic wildlife property programs, or select infrastructure investments give individuals the chance to support specific missions while adding variety to a financial plan. These programs vary widely in structure and purpose, offering unique ways to combine personal values with long-term planning.
Potential Strategic Benefits of Alternative Assets
Diversification
Alternatives can help reduce reliance on traditional market cycles by adding assets that behave differently from public stocks or bonds.
Income Potential
Some alternative strategies are designed to produce income. Actual results depend on the specific investment and current conditions.
Inflation Awareness
Hard assets such as commodities or real estate sometimes help support purchasing power during inflationary periods, although outcomes will vary.
Tax Characteristics
Certain structures may provide depreciation, deferral features, or other tax-related benefits that complement a long-term tax-aware strategy when used appropriately.
These tools are not uniform and should be chosen with care. Each carries its own risks, liquidity constraints, and timelines. The value comes from selecting a blend that supports your broader goals rather than focusing on any single strategy.
The Accredited Investor Advantage: A Wider Universe of Possibilities
Many alternative investments are limited to accredited investors, which creates access to opportunities unavailable to the general public. Some individuals are surprised to learn that they already meet the qualifying criteria, especially executives or high-income households. Accreditation simply indicates eligibility to evaluate private offerings that operate outside traditional markets.
It is not a mark of superiority or a guarantee of outcomes. It is an entry point that expands the menu of options.
A Disciplined Approach to Alternative Investing
A thoughtful plan begins with clarity. Alternative assets work best when they serve a defined purpose rather than simply widening a portfolio.
Consider starting with these questions:
What is the objective?
Income, appreciation, or legacy planning each point toward different tools.
How much liquidity do you need?
Many alternatives require longer commitments and have limited exit options.
Who manages the investment?
The experience, communication, and transparency of the sponsor or manager often influence the overall experience.
How does this integrate with tax planning?
Structures such as DSTs, installment sales trusts, charitable trusts, and strategic retirement plans may align with alternatives to support long-term goals.
Alternative assets are not about chasing trends. They offer a way to build a more layered financial strategy that reflects your priorities and supports a resilient plan for the future. When used with care and supported by qualified advisors, these tools can help preserve capital, create income, and contribute to a legacy that reflects your values.
If you or someone you know needs guidance on tax-efficient investing strategies, 1031 DST Group is here to help. Get a free consultation or learn more at https://www.1031dstgroup.com/free-consultation
Curious about the terms behind alternatives? Download our free eBook: The Language of Investing: A Glossary of Essential Financial & Tax Terms for Investors → Get the eBook.
Disclosure:
Portions of the written content in this article were assisted by artificial intelligence (AI) technology tools and reviewed by 1031 DST Group for quality and compliance. This material is provided for educational and informational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. A 1031 exchange may not be suitable for all investors and may involve risks, including the potential for loss of principal. Always consult with a qualified tax advisor or financial professional. Some investments such as Alternative investments and DSTs involve significant risks and may be illiquid, speculative, and suitable only for accredited investors*.
*Accredited investors are defined under SEC Rule 506 of Regulation D. Generally, an investor is deemed accredited if their net worth is greater than $1,000,000 exclusive of their primary residence and/or their annual income exceeds $200,000 for the current and past two years. Click here to learn more.
Ray DeWitt is a Registered Representative of Realta Equities, Inc. and an Investment Advisory Representative of Realta Investment Advisors, Inc. Investment Advisory Services are offered through Realta Investment Advisors Inc., an SEC registered investment advisor. Securities are offered through Realta Equities, Inc., Member FINRA/SIPC. Neither Realta Equities, Inc. nor Realta Investment Advisors Inc. is affiliated with C-Suite Network Or 1031 DST Group. Realta Wealth is the trade name for the Realta Wealth Companies. The Realta Wealth Companies are Realta Equities, Inc., Realta Investment Advisors, Inc., and Realta Insurance Services, which consist of several affiliated insurance agencies.
