Diversify your investments: Cryptocurrencies and real estate aren't your only options!
Integrating Alternative Assets into Wealth Strategies
Stock market corrections at the beginning of 2025 have rekindled interest in diversification assets as a means of safeguarding investments. In the latest episode of "The Great Savings Rendezvous" on our website/Radio Heritage, financial experts share insights on how to effectively factor these assets into wealth management strategies.
'"Don't put all your eggs in one basket"* - the old adage of the prudent investor - has found fresh relevance following the stock market downturn triggered by Donald Trump's announcements on April 2nd. Investors with diversified portfolios, spread across various geographic zones and sectors, experienced smaller losses during this period compared to those heavily invested in a single asset class, such as equities.
Expanding this diversification principle to a complete financial inheritance, assets like gold, Bitcoin, unlisted investments, and real estate tend to be more resilient to shocks, ultimately leading to better outcomes. As gold has climbed by 26% over the last six months, is this the time to increase the weight of these minority investments, particularly due to their robust performance?
Gold and Bitcoin as Complementary Placements
Being mindful of potential risks is essential when including these less traditional assets in a portfolio, warn experts like Géraldine Métifeux, associate manager at Alter Egale. "These unconventional placements are also a breeding ground for scams," she cautions, while finding it prudent to allocate no more than 5% of the portfolio to these alternative assets.
Souleymane-Jean Galadima, co-founder and CEO of Sapians, agrees that cryptocurrencies like Bitcoin should comprise only a portion of the portfolio, given their high volatility. Despite Bitcoin's robust performance and its status as a strategic asset by some large asset managers, it's important to maintain a balance, as "there's still value in holding a bit of this 'digital gold'" in the portfolio, he advises.
More 'atypical' investments, such as wine, forests, works of art, and classic cars, can play a role in a diverse portfolio's tax benefits, with Galadima recommending a modest allocation of 1-2% for such pleasurable investments. Nonetheless, he advises exercising caution when venturing into these uncharted waters, emphasizing the importance of avoiding schemes that seem too good to be true.
Answering Your Questions
In the "Your questions, our answers" section, our experts address your queries, including:
- "How to find the notary in charge of an old succession?"
- "Where to place a large cash reserve at the moment?"
- "Olographic will or donation between spouses: which solution is the most solid?"
Please send your questions to: question@our website to feature them in a future issue of "The Great Savings Rendezvous."
By taking a measured and strategic approach to integrating alternative assets into a wealth portfolio, investors can enhance their ability to withstand market shocks and potentially boost long-term returns. Building a resilient portfolio involves adopting an asset allocation framework, considering private market strategies, employing investment strategies like hedge funds and funds of funds, managing risk (liquidity and volatility), monitoring performance, and regular reviews.
Investors may consider allocating a small portion, such as 5%, of their portfolio to alternatives like gold, Bitcoin, or unlisted investments to diversify their wealth strategies, providing resilience against market shocks. On the other hand, when it comes to personal finance, a savvy approach might involve setting aside cash reserves, as Galadima suggests, but it's crucial to find a suitable place for such large reserves.
