Riding Out Market Swings: How Diversifying with Alternative Assets May Offer a Sense of Stability

Market volatility isn’t new, but it can feel more intense when headlines shift daily and portfolios bounce with every tick of the index. During these stretches, many investors check their account balances multiple times a day, an instinct that can stir anxiety and lead to emotionally driven decisions.

For those seeking steadier ground, diversifying with alternative assets such as real estate, private equity, and private lending may offer peace of mind.

The calm of illiquidity

Unlike traditional public market investments, which update in real time, many alternative assets are not priced daily or even monthly. This illiquidity can work in an investor’s favor. Without constant valuation updates flashing across a screen, there’s often less temptation to react to short-term fluctuations. This cycle of checking investment values during a downturn can heighten anxiety and increase the likelihood of reactive decisions. Illiquid assets, by design, tend to promote a long-term mindset and may help quiet the noise that fuels short-term stress.

As noted in InvestmentNews, “The… damage inflicted on owners of alternatives, often referred to as private market assets, however, has been far less. That’s primarily because most of these private investment vehicles are not marked-to-market, thereby eliminating the need to check prices by the day, hour or minute.”

In that sense, alternative investments can create space for more long-term decision-making. When markets are at their most turbulent, that emotional distance can be a powerful advantage.

Alts may reduce noise and reaction

Rather than responding to daily headlines or minute-by-minute price changes, investors in alternative assets often move at a different pace. Real estate, for instance, could reward those who stay committed over time. Private market investments, too, are typically structured with multi-year timelines in mind.

This built-in delay can act as a buffer, shielding investors from some of the mental stress that often accompanies traditional market swings. In moments of uncertainty, that sense of steadiness may prove just as valuable as performance.

It’s not only about reducing noise but also gaining a clearer starting point. Many private market investments offer defined yields or structured income expectations, which can provide a greater sense of clarity and direction. For some investors, that visibility may help support more confident, long-term decisions, even when public markets feel anything but predictable.

Long-term investments with tax benefits

Illiquid long-term assets like real estate or private equity are options investors can consider for tax-advantaged retirement accounts. When held inside a Traditional IRA or Roth IRA, these investments can grow tax-deferred or tax-free, which can help returns grow more over time.

Because these types of assets often produce returns gradually – through rental income, interest payments, or eventual appreciation – they can align with the longer timeframe of retirement investing. In a Traditional IRA, earnings grow tax-deferred until withdrawal. In a Roth IRA, qualified withdrawals may be completely tax-free.

And for those looking to step away from the screen spiral of daily market updates, using a self-directed retirement account to hold alternative investments can combine the stability of slower-moving assets with the benefits of tax-advantaged growth.

Next steps

Interested in exploring how alternative assets might fit into your retirement strategy? Consider speaking with an IRA Counselor to learn more about the possibilities. Schedule a call with an IRA Counselor to get started.