1. Alternatives provide diversification to protect your portfolio
Diversification is key in a balanced portfolio. We’ve all heard the phrase ‘don’t put all your eggs in one basket’ and this is exactly what we’re referring to. When someone goes all-in on the stock market, that person is putting all of their investment dollars at risk in the event of a down market. If that same person, however, made sure that 30% of their portfolio was not in the stock market, but in an alternative such as gold, then that 30% of their portfolio would remain safe while the other 70% sees the effects of a down market. Diversification is how investors can ensure their dollars are spread over different investments, in case one goes sour.