“From my years advising mostly mass affluent, most of my clients do not need alternatives,” said Valega. “However, more recently, digital asset investing has been included in this category. For this reason, I decided to pursue the RIADAC  certification in digital assets. I think it is important to understand and follow this space, as digital asset technology and investing becomes more mainstream.”

“Alternative investments can come in a variety of shapes, colors and sizes,” said Lawrence. He said his firm has seen success using covered call strategies to generate income and managed futures to get exposure to commodities and energy markets. “We have found it’s best to evaluate each individually, as well as understand the underlying process. Which alternatives that we use, how we use them and the allocation purely depends on the goals, risk tolerance and what the client would like to achieve.”

“I believe the average investor needs to build a sound financial foundation before investing in alternatives,” said Friedman. “An emergency reserve, 401(k) participation, standard brokerage account, college savings (if appropriate), necessary insurances to protect their family should be in place before investing in alternatives. It’s easy to be blinded by the glitz of some ‘alts,’ but the volatility or lack of liquidity in most of these investments usually does not fit into people’s investment programs.”

“If there is more money than ever chasing the same alternative solutions—private equity comes to mind—at what some consider extremely high valuations, should we stop and consider what happens if all that newly invested capital is put to the test in an ugly economy?” asked Maksimovich. “I have a feeling the liquidity crisis we saw in some alts during the Great Recession will be repeated.”

“I have explored this area pretty heavily and still find a lot to be desired,” said Newell, who opened his practice in February. “Larger asset managers have tried to make these accessible through liquid options like open-ended mutual funds. The problem is the performance stinks on many of them for long stretches of time, with pops of  strong performance. On their face they sound good, especially this year. However, the problem is being able to successfully and consistently predict that performance. Which we all know is nearly impossible."

“Recently, I have been looking at nonliquid options and these seem to be more attractive from a potential return perspective,” he said, pointing out that illiquid options still carry a significant loss of principal risk, can require much higher minimum investments and often require a years-long capital commitment.

“So, yes, in theory, alternatives sound great. The silver bullet still eludes us though, and investors need to walk into these with a high level of caution. The question always returns to what is the client trying to accomplish and how do we position them to have a high degree of confidence in their ability to do that. Alternatives might help, but they may not.”

“Last year we began looking at every alternative to the traditional stock and bond portfolio in case stagflation is the new paradigm,” said Parks. “We have incorporated targeted ETFs such as the dollar, gold/silver, base metals, energy and others. We are now researching structured products and considering adding these to our mix. While we will not deviate from dividend stocks as our base investment, we need to consider looking under every investment rock to address risk reduction. Back testing these ideas and early implantation show promising results, but more time will be needed to see if these will take a bigger place in our portfolios.”

“The challenges for many investors are the complexity and structures of investing in alternatives,” said Salzer. “As many of the offerings (partnership structures) are complex and there is only moderate to no liquidity (although this is improving due to the fast growth of secondary investors), and time horizons a decade plus, this isn’t an area for those who are inexperienced or lazy. Successful investing in alternative asset classes takes significant time, money and dedication in order to separate the wheat from the chaff. This is why an experienced multifamily office or OCIO can make a world of difference.”