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In August, an executive order signed by President Donald Trump (1) opened the door for certain “alternative assets” such as private credit, private equity and cryptocurrencies to be included in 401(k)s, expanding what Americans can keep in their 401(k)s and other tax-advantaged retirement accounts.
Proponents of the move said that this change could democratize access to investment opportunities traditionally reserved for institutions and the wealthy. Critics, however, have warned that these assets carry complex risks that may not be well understood by the average investor.
Here’s how EO could change America’s retirement landscape — and how to protect your portfolio from unnecessary risk.
Traditionally, some alternative assets – such as private equity and hedge funds – were restricted to “accredited investors” who either had a net worth of more than $1 million (excluding their primary residence) or an annual income exceeding $200,000, according to the US Securities and Exchange Commission (2).
However, the alternative asset landscape has changed over the years, and retail investors are showing increasing interest in these investments. A survey by market research firm Opinium found that 21% of retail investors have considered alternative assets, and another 5% plan to invest in them (3).
The most common reason was diversification. Many investors want to move beyond traditional stocks and bonds in search of higher returns.
Some advisers even say that the traditional 60/40 mix of stocks and bonds should be revised to 50/30/20, with 20% being made up of alternative assets. The idea is that alternative assets can provide some resilience against market turbulence, which stocks and bonds may be more susceptible to.
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For example, gold is often seen as an alternative asset that can offer greater stability to your portfolio if stocks are weak. The precious yellow metal is also on a historic bull run, with the spot price hitting a high of around $4,300 per ounce in October (4).
With a gold IRA through Thor Metals, you can invest directly in physical precious metals, such as gold, rather than stocks and bonds.
Gold IRAs help investors hold physical gold or gold-related assets in a retirement account, combining the tax advantages of an IRA and the protective benefits of investing in gold. This can make it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
Another popular alternative asset is real estate. But you don’t have to buy a property outright to benefit from the property market.
One option is to tap into this market by investing in holiday home shares or rental properties through Arrived.
Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with owning your own rental property. This means no leaking faucets, burst pipes or midnight maintenance calls.
Start by browsing their selection of verified properties, each chosen for their potential appreciation and income generation. Once you select a property, you can start investing with just $100, potentially earning quarterly dividends.
If investing in real estate through rentals doesn’t appeal to you, another alternative asset avenue is commercial real estate. For years, direct access to the $22.5 trillion commercial real estate sector has been limited to a select group of elite investors – until now.
First National Realty Partners (FNRP) allows accredited investors to diversify their portfolio through grocery anchored commercial properties, without taking on the responsibilities of being a landlord.
With a minimum investment of $50,000, investors can own a share of properties leased by national brands such as Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net rents, accredited investors can invest in these properties without worrying about tenant costs cutting into their potential earnings.
Simply answer a few questions — including how much you’d like to invest — to start browsing their full list of available properties.
Private market funds, which raise money from investors in assets that are not publicly traded on a stock exchange, are another alternative asset class. Private market funds often advertise higher return potential than traditional stocks and bonds, but in practice, those lofty goals can obscure high fees, limited liquidity and inconsistent performance.
As of May 2025, only two of the 14 private equity and venture capital funds tracked by Morningstar had outperformed the S&P 500 since inception (5). Meanwhile, typical private equity fees include 1% to 2.5% in annual management fees — plus 20% or more in performance fees, according to Hamilton Lane (6). This means that as your portfolio grows, if it grows at all, you must withdraw more.
Unlike public markets, private assets do not have a deep secondary market, which makes it difficult to exit investments.
“If there is a desire to get out of private equity, there is no way to actually sell that company or sell the shares – there is simply no market for it,” said Charles Rotblut, vice president of the American Association of Individual Investors, in an interview with CNBC (7).
The risks of alternative assets go beyond their impact on individual portfolios. A report by the Institute for Economic Policy Research warned that broad retail access to illiquid and opaque assets could create a “systemic risk engine”, increasing the likelihood of financial instability in future downturns (8).
For most investors, sticking with low-cost index funds will remain a sound strategy. However, if you are keen to explore private assets, it is worth consulting with a financial advisor to ensure that they fit into your overall financial plan.
Lisa Kirchenbauer, founding partner and senior advisor at Omega Wealth Management, told NPR (9) a sensible approach is to allocate a small portion — about 5% to 10% — of your portfolio to these asset classes.
This can give you some market resilience without overexposing yourself to illiquidity risks.
For more personalized advice on whether alternative assets are right for you, try the Advisor.com team. They can connect you with a financial advisor suited to your needs and based in your area. All of their advisors are pre-vetted fiduciaries, which means they have a legal obligation to act in your best interest.
After entering your ZIP code to find a financial professional nearby, you can set up a free, no-obligation phone call to make sure they’re right for you.
We rely only on verified sources and credible reporting from third parties. For details, see our ethics and editorial guidelines.
The White House (1); SEC (2); Opinion (3); APMEX (4); Morningstar (5); Hamilton Lane (6); CNBC (7); Institute for Economic Policy Research (SIEPR) (8); NPR (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
