How High-Net-Worth investors are diversifying beyond stocks to protect and grow their wealth with alternative assets
High-net-worth investors are increasingly looking beyond traditional stocks to hedge risk and find new growth opportunities.
Alternative assets—like real estate, private equity, and merchant cash advances—can offer you diversification, stability, and potentially high returns.
In this guide, we’ll explore the top alternative investments and why they’re gaining traction.
Why High Net Worth Investors Are Looking Beyond Stocks
With inflation, interest rate shifts, and market volatility, relying on stocks alone can feel riskier than ever. Many high-net-worth investors are rethinking their portfolios, looking for options that offer more stability and predictable growth.
That’s why alternative assets—like the SV Mid-Term Note I—are gaining traction. Instead of weathering every market swing, investors like you can diversify with assets designed to generate potentially strong returns while keeping risk in check.
The Top Alternative Assets for HNW Investors
1. Real Estate & REITs
Pros
Real estate has long been a favorite for HNW investors, offering passive income through rental properties and long-term appreciation.
Real Estate Investment Trusts (REITs) can provide an easier way to gain exposure without the hassle of property management. Investors can also benefit from tax advantages like depreciation deductions and 1031 exchanges.
Cons
Real estate is not without risks—market fluctuations can impact property values. Plus, selling real estate isn’t always quick, making it a less liquid investment.
2. Private Equity & Venture Capital
Pros
Investing in private companies before they go public can be rewarding. Private equity firms and venture capital funds offer you the opportunity to back early-stage businesses with growth potential.
Cons
Private equity and venture capital often come with long lock-up periods—sometimes over a decade—so you need to be comfortable with illiquidity.
Additionally, startup investments are inherently risky, with some companies failing before they ever reach profitability. According to research by Embroker, 90% of startups in the US ultimately fail, making it important for investors to carefully assess opportunities before committing capital.
3. Merchant Cash Advances (MCAs)
Pros
MCAs provide businesses with upfront capital in exchange for a percentage of future sales, offering investors high-yield returns that aren’t directly tied to stock market performance. This asset class can generate predictable income and help diversify your portfolio.
Cons
The risk can come from business defaults—if a company struggles financially, it might not be able to meet its repayment terms. To mitigate this, successful MCA investments are typically spread across multiple deals to reduce exposure to any single business.
4. Collectibles & Alternative Stores of Value (Art, Watches, Classic Cars, Wine, etc.)
Pros
Luxury assets like fine art, rare watches, and investment-grade wine have historically appreciated in value, making them a potentially attractive hedge against inflation. These tangible assets often hold cultural and historical significance, adding to their appeal.
Cons
Collectibles often require specialized knowledge to identify profitable investments. Liquidity can also be an issue—selling a rare car or painting can take months or even years because of the difficulty of finding the right buyer for such niche collectibles.
Alternative assets can help HNW investors hedge against market uncertainty and access unique opportunities for wealth growth. The key is understanding each asset’s risk profile and ensuring it aligns with your broader financial strategy.
Expanding Your Portfolio with Alternative Assets
Want to explore which alternative assets align with your own goals? Take our quiz or check out our expert guides on portfolio diversification today.
