Market Insights: How you can invest in alternative investments 🖼️

🌊 Why alternative investments are making a splash
 

Alternative investments have been getting a lot of attention recently. “Alts” are still somewhat opaque, and mostly the domain of billionaires and university endowments. But new avenues for retail investors to invest in the space are popping up too.

This week we are diving into what alternatives actually are, and why they may (or may not) be worth considering for your portfolio.

This week's Market Insights is a 6 minute read! Full article here

Quote of the week

“The infrastructure investments we make now will determine the kind of economy we have in the future.”

Richard Florida

What Happened In The Markets This Week?

Here’s a quick summary of what’s been going on:

🤖 Anthropic sparks an existential crisis for software stocks (InvestingLive)

• What happened:  Anthropic released several new tools, seen as challenging the moats protecting major software stocks. First came Claude Cowork AI Agent which allows users to build their own automated workflows rather than relying on SaaS platforms. This is seen as a threat to major platforms like SAP, Salesforce and Docusign.

  • Next came a plugin that allows the Cowork agent to review and draft legal docs. This threatens several legal software platforms like Wolters Kluwer and LegalZoom.com.

  • Finally, Anthropic released Claude Opus 4.6, highlighting its ability to perform complex financial analysis and achieving top benchmark rankings. Following the launch, shares in financial data and analytics firms such as FactSet, Moody’s, and S&P Global fell sharply.

• How it impacts investors: Markets are starting to question how defensible high-margin software businesses really are as AI gets more powerful. That uncertainty is showing up as short-term volatility, with investors repricing stocks that look more exposed to automation risk.

• Next steps: Use the Stock Screener to compare software companies by size, profitability, and balance sheet strength. Some companies caught up in the sell-off may in fact have durable moats. 

   

₿ Strategy selloff deepens as Bitcoin slide pressures balance sheet (TheStreet)

• What happened: Strategy (formerly MicroStrategy) shares have fallen about 70% from their peak as Bitcoin dropped to around US$65,000, leaving the company with roughly US$4 billion in unrealized losses. 
  

• How it impacts investors: It’s a reminder of the risk in using highly leveraged stocks as a proxy for crypto exposure. Bitcoin’s volatility is now flowing directly through to Strategy’s balance sheet and refinancing outlook, and that stress could easily spill over to other crypto-linked names.
  

• Next steps: Review Strategy’s risk profile and balance sheet metrics to determine whether the company remains healthy despite the fall.
  

To see our take on these market stories below, simply check out the full article!

• 🚗 Volkswagen overtakes Tesla in Europe as EV competition ramps up 

• 💶 ECB pauses at 2% as strong euro complicates growth outlook

• 🤖 Oracle raises $45 billion to fund massive AI infrastructure push

Now let’s dive into the main piece.

🖼️ Should you hit the ALT button on your portfolio?

For decades, a portfolio consisting of stocks, bonds and a little cash has been sufficient to grow wealth for most investors. 

Over the last few years however, we have begun to see a “democratization" of alternative investments, which are becoming more accessible, and more sought after by retail investors.

There are a few good reasons to consider these ‘alts.’ They offer several advantages over traditional investments, but they also come with unique complexity and risks.

There has been increasing interest and investment in alts in recent years - Morningstar

What we're actually talking about when we say "alternatives"

The term alternative investments refers to just about any investment that isn’t a publicly listed security , or “cash-like” (ie. savings accounts and deposits.)

Broadly, we can divide alternatives into two categories; collectibles and investment vehicles.

Some of the biggest shifts in investing are happening outside traditional portfolios.

Investors are increasingly looking beyond stocks and bonds, as private markets, infrastructure, and credit take on a bigger role in how wealth is built and preserved.

Our full article covers:

🏗️ Why alternatives are gaining traction as private markets capture more growth earlier.

💸 How private credit and infrastructure are filling the gaps left by bonds especially in an inflation-heavy world.

📊 Why fund manager skill matters more than market direction with returns in alternatives varying widely.

🔓 How investors can access alternatives through public markets, from listed asset managers to private credit vehicles.

💬 Join the discussion by leaving a comment!

What alternative investments do you hold in your portfolio?

Key Events During the Next Week

Tuesday

• 🇺🇸 US Retail Sales MoM

  • 📉 Forecast: 0.4%, Previous: 0.6%

  • ➡️ Why it matters: Slower spending signals consumer fatigue, supporting the case for further Federal Reserve interest rate cuts.

Wednesday

• 🇺🇸 US Unemployment Rate

  • 📈 Forecast: 4.5%, Previous: 4.4%

  • ➡️ Why it matters: A rising jobless rate indicates labor market softening, increasing pressure on the Fed to prioritize growth.

• 🇺🇸 US Inflation Rate YoY
  
  • 📉 Forecast: 2.4%, Previous: 2.7%
    
  • ➡️ Why it matters: Significant cooling brings the Fed closer to its target, cementing expectations for continued monetary easing.

Thursday

• 🇬🇧 GB GDP MoM

  • 📉 Forecast: 0.1%, Previous: 0.3%

  • ➡️ Why it matters: Slow growth gives the Bank of England more room to lower rates.

Earnings season continues with large caps in most sectors reporting 4th quarter earnings:

• Apollo Global Management

• AstraZeneca 
• Coca-Cola
• Cisco Systems
• McDonald's
• Shopify
• Applied Materials
• Arista Networks
• Enbridge

Until next week, invest well.

Simply Wall St