1. Many investors are tired of hair-raising market volatility.
Last year was one of record-breaking volatility. In March 2020, the 11-year bull market abruptly came to an end, and the VIX volatility index hit a record high. Although the S&P 500 ended the year up 16%, volatility remained elevated throughout 2020. The VIX spiked several more times, capping off with the presidential election in November.
This volatility was not uniform across industries. The Covid-19 pandemic led to significant volatility increases in industries like transportation, apparel, and travel and leisure, while others such as healthcare and telecom were much less impacted.
Alternative investments are generally uncorrelated with public markets, meaning that adding them to a portfolio can increase diversification and reduce overall portfolio volatility. For example, gold and silver, two of the most well-known alternatives, both hold value well and have a low correlation with stocks. Real estate can beat the market depending on location and market conditions. U.S. farmland, my specialty, and the most newly accessible alternative is uncorrelated with most major asset classes, including stocks, bonds, real estate, and gold, and has a track record of maintaining value during times of volatility.