By Scott Harrigan
As markets continue to fluctuate and confidence in traditional strategies wanes, investors are looking for new ways to build resilient, future-ready portfolios. Private market investments—once the domain of institutions and the ultra-wealthy—are becoming essential for individual investors, especially within retirement accounts. With long-term potential and lower volatility as opposed to public markets, private assets offer a compelling path forward.
Market Volatility Has Investors Rethinking the Status Quo
The markets have been on a wild ride since the start of the year, leaving investors feeling understandably uneasy. January kicked off with an unexpectedly strong December 2024 jobs report, which prompted fears that the Federal Reserve might delay cutting interest rates. Then came a wave of proposed tariffs and trade policy shifts throughout February and March, which further rattled investor confidence.1
Today, those anxieties came to a head. The S&P 500 suffered its steepest single-day drop since the early days of the pandemic—down nearly 5%—reminding us all just how fragile public markets can be.2
It’s not just headlines driving concern. In Alto’s recent investor survey, 38% of Gen X respondents—the generation closest to retirement—told us they aren’t confident the stock market will provide enough for retirement. Another 29% said they’re only slightly confident.3
This highlights a critical concern.
For decades, traditional diversification strategies focused largely on public stocks and bonds. But in today’s volatile environment, it’s time to think broader. A modern approach to diversification should include exposure to private market investments—assets that are less correlated to public markets and potentially more resilient over time.
Private Markets: A Powerful Diversifier with Long-Term Potential
Private investments—such as private equity, venture capital, and private credit—offer a compelling counterbalance to the unpredictability of public equities. Their performance isn’t tied to the minute-by-minute movements of the market, and over time, they’ve demonstrated an ability to deliver impressive, often outsized returns.
According to Pitchbook’s Q42024 data, select VC funds over a recent five-year period showed average annualized returns that exceeded certain public benchmarks. Past performance is not indicative of future results.4
At Alto, we’ve seen firsthand how investor behavior is shifting. A majority of the investments made on our platform have flowed into early-stage startups, VC funds, and private equity. These aren’t just niche allocations—they’re meaningful portfolio decisions that reflect a growing desire for stronger, more diversified returns.5
The Hidden Opportunity Inside Retirement Accounts
When investors diversify, they typically think about their taxable brokerage accounts. But it’s their retirement accounts—IRAs and 401(k)s—that usually hold more of their investable assets.
As of this year, retirement assets in the U.S. reached $44.1 trillion, making up more than a third of all household financial assets. Despite their size, many retirement accounts remain allocated primarily to traditional public market investments, which may not provide the full spectrum of diversification opportunities.6
We launched in 2018 to bridge this gap and connect two vital pillars of the financial ecosystem: retirement savings and private market opportunities. Diversification is one of the most effective tools available to investors—and at Alto, we’ve made it accessible.
Since then, nearly 30,000 investors have used Alto to allocate close to $2 billion into alternative assets—demonstrating the growing demand for broader diversification and reaffirming the importance of expanding access to private market opportunities within retirement portfolios.
Rethinking Retirement in a New Investment Era
For years, the 60/40 portfolio—60% stocks and 40% bonds—was considered the gold standard for retirement investing. Over the past decade, however, investors and analysts alike have increasingly questioned whether this approach remains adequate in today’s economic climate. With inflation, interest rate uncertainty, and market volatility now reshaping the landscape, the long-simmering doubt about the reliability of this traditional formula is becoming more pronounced, prompting a reassessment of what true diversification should look like in the modern age.
Institutional investors and high-net-worth individuals were among the first to adapt. Many have increased their exposure to private assets such as real estate, infrastructure, and private credit. According to a report from its Chief Investment Officer (April 2024), prestigious university endowments like the Harvard Endowment allocated approximately 78% of its portfolio to alternative assets as part of its long-term investment strategy. These strategies are tailored to institutional mandates and may not be appropriate for retail investors.7 In his recent shareholder letter, BlackRock CEO Larry Fink emphasized that this shift does not just apply to institutions, noting that the future of investing may look more like 50/30/20—stocks, bonds, and alternatives. As an established voice in the investment community, Fink's insight underscores the growing consensus that the future of portfolio management must embrace a more diversified approach.
From our vantage point in the retirement space, we are also seeing individual investors taking notice. Our survey found that 45% of Alto users already allocate 10% or more of their portfolios to alternatives, and another 33% plan to do the same within the next six months.8
The message is clear: investors are beginning to rethink the role of private markets in their retirement strategies—and they’re doing so with purpose.
Unlocking Access to Private Market Investments for Retirement
Historically, private markets have been more accessible to institutional investors, family offices, or those with significant networks and capital. This landscape is gradually evolving. Thanks to the rise of fintech platforms like Alto, private investing is no longer a gated community. Alto aims to simplify the process for eligible investors seeking to explore private market opportunities through their retirement accounts.
The barriers that once made private investments difficult to access—complex paperwork, administrative hurdles, and high minimums—are being removed. Alto has worked to streamline these processes, making it easier than ever to invest in opportunities that were once off-limits to all but the wealthiest.
Volatility is an inevitable part of investing, and while it’s nothing new, how you prepare for it can make all the difference. By looking beyond public markets and embracing a broader, more modern approach to diversification, investors can build retirement portfolios that are not only more resilient but also better positioned for long-term growth. It’s time to stop viewing private markets as optional and start seeing them for what they truly are: an essential component of a future-ready retirement plan.
Whether you're nearing retirement or just beginning to plan, the tools and access to diversify your portfolio are now available. The opportunity to take control of your financial future is here—and it’s within your reach.
Explore opportunities to diversify your retirement portfolio through a self-directed IRA with Alto.
1 Bureau of Labor Statistics (BLS)
2 S&P as of April 3, 2025
3 Alto Retirement & Alternatives Study, March 2025
4 Q4 2024 Pitchbook Analyst Note: Private Wealth unlocks new growth for venture capital
5 Alto Platform Data, April 2025
6 Investment Company Institute, March 2025.
7 Harvard Assets Reach $53B With 9.6% Return, Endowment Remains World’s Largest
8 Alto Retirement & Alternatives Study, March 2025
