Have you started to wonder whether the stock market is as safe a place to invest your money as it used to be? If so, you’re not alone. Many professional investors are reducing their exposure to public markets and looking for opportunities elsewhere.
That doesn’t mean they expect the stock market to collapse. It does suggest that they see increased risk, potentially lower returns and the possibility that a correction may be in order. Sophisticated investors are increasingly diversifying beyond traditional stock-and-bond portfolios into cash, gold, commodities, real estate, private credit, private equity and venture capital.
The major stock indexes may also give a misleading impression of the market’s overall strength. Much of the recent growth has been driven by a relatively small number of enormous technology companies. As of April 2026, the ten largest companies in the S&P 500 represented about 38.6% of the index, while Nvidia alone represented roughly 8%. The headline indexes may be rising even when the average public company is not performing nearly as well.
Some of the world’s best-known investors are responding accordingly. Warren Buffett’s Berkshire Hathaway has been a sustained net seller of public equities and held nearly $400 billion in cash and short-term U.S. Treasury bills as of March 31, 2026. That doesn’t mean Buffett has abandoned the market, but it does suggest that he has had difficulty finding investments at attractive valuations. Ray Dalio has similarly questioned the conventional stock-and-bond portfolio and advocated holding gold as a hedge against government debt and currency-devaluation risks.
So, what are alternative investments? They are investments outside traditional publicly traded stocks, bonds and cash. The category includes real estate, private credit, hedge funds, commodities, private equity, angel investments and early-stage venture capital funds. Angel investors invest directly in startups, while venture funds pool capital to build diversified portfolios of emerging companies.
These investments can offer higher return potential and greater diversification, but they also come with tradeoffs. They are generally illiquid, higher risk and require longer holding periods. You should never invest money in early-stage companies that you may need in the near future.
Should investors take all their money out of public markets? Absolutely not. Stocks and bonds should remain the foundation of most portfolios. It may, however, be worthwhile to investigate alternatives that a traditional wealth advisor may not regularly discuss. Because many advisors are paid based on the assets they manage, they may have little incentive to recommend investments that move money outside their portfolio program.
RVC’s general guidance is that most investors should keep alternative investments below 10% of their investable assets. The appropriate amount depends on experience, liquidity needs, risk tolerance and financial position.
Many alternative investments are limited to accredited investors, generally those with a net worth above $1 million, excluding their primary residence, or qualifying annual income. For those who qualify, angel investing can provide access to innovation and growth that increasingly occurs before companies reach the public markets.
Rockies Venture Club has been educating investors and entrepreneurs for nearly 40 years. RVC members invest together, share their experience and conduct due diligence as a group. They also become part of a lively community of people who enjoy learning, investing and supporting entrepreneurs.
If you’re angel curious, visit membership.rockiesvc.ai
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