Diversification and connection
A key concept of MPT is diversifying your investments across stocks, bonds, and alternatives. It’s also important to diversify within stocks, bonds, and alternatives. How much should you invest in each type of asset? It really depends on your personal situation as well as market conditions. We believe for many investors, investing up to 20% of their portfolio in alternatives is a good place to start.
Alternative assets can also be attractive to investors because they can provide connection on a personal level. You can invest in assets related to causes you support. You can connect with fellow investors about shared interests, from art to trading cards. Or you can invest in something that has a special connection to a memory.
How big is the alternatives market?
How big is the alternatives market? It’s tough to get an accurate measurement, because of how many different assets can be considered alternatives. We believe there’s at least $15 trillion in value. Likely, there’s much more. In comparison, the total value of shares listed on the Nasdaq and NYSE is typically $20-30 trillion for each.
What’s clear is that alternatives are a large asset class comparable to traditional asset classes. And, the alternatives market is growing. Some key factors driving growth are:
- New marketplace launches
- New types of investable assets (such as sneakers, cryptocurrencies, NFTs, and carbon offsets)
- New creators and investors
Every connects investors and curators with a passion for alternative assets. As an investor, you can use Every to diversify your portfolio, learn about investing, and connect with experts and like-minded investors. As a curator, you can use Every’s platform, tools, and analytics to scale your audience and grow your business. For more information, visit us at www.investevery.com.
1. Harry Markowitz was an economist known for his work in Modern Portfolio Theory, earning him a Nobel Prize in Economics in 1990.
2. A 2019 presentation by Blackstone noted that on average, pension funds and endowments allocated on average 27-29% of their portfolios to alternative investments.