Editor’s note

Good morning. It’s time to finally dust off the binder of Pokémon cards that’s been under your bed since 2002. Welcome to Alternative Investments Brew, a special edition all about financial assets other than stocks and bonds. We’re talkin’ private markets, trading cards, fractional horse ownership, domain names, and more. So, close the Stocks app and open your horizons to some very different kinds of investing.

setting the scene

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Put your money in an index fund? And then what? Wait around for 50 YEARS?? That’s still one of the most common ways to invest, but there are others. Alternative investments that historically were reserved for rich people or sophisticated investors have recently attracted more retail investors—especially young ones. But like Pokémon card and private credit payouts, nontraditional investments can present big risks for the uninitiated.

Follow the money: Alternative investments, or alternatives, can include a wide range of assets like crypto, meme stocks, real estate, and collectibles as well as private, pre-IPO stocks. And high-net-worth investors aged 21 to 45 are flocking to them:

• About 67% of Gen Z and millennial investors believe that stocks and bonds can’t deliver above-average returns anymore, according to this year’s Bank of America Private Bank Study of Wealthy Americans.
• Younger generations’ distrust of traditional institutions plays another big factor in the rise of alternatives, according to the study’s 2025 results.
• Nearly 20% of millennials’ investment portfolios consist of alternatives, compared with Gen X’s 11% and boomers’ 6%, according to Goldman Sachs data.

High risk, maybe high reward

Banks and retail trading platforms have scrambled to offer wealthy, younger clients a smorgasbord of new investment options like private equity, real estate, and credit. But the line between the “democratization of investing” and straight-up gambling has never been blurrier with the rise of meme stocks and private-market investments that lock your money in during times of turbulence.

There’s a reason these investments were once reserved for teams of institutional investors with deep pockets and time to comb through the fine print: The potential big wins often come with a higher possibility of major losses and less transparency.

So, why are alternatives now courting everyone else? Their traditional investors (massive endowments, hedge funds, and pensions) already have about a fifth of their portfolios invested in the asset class, so it’s unlikely they’ll want to toss more money towards alts. Meanwhile, individuals have just 7% of their portfolios allocated to alternatives with plenty of room to grow, according to the 2024 Bank of America Survey.—MM

      

Sponsored By GLOBAL X ETFS

Roads are cracking, grids are aging, and broadband is still waiting to be invited into every household. Independent assessments have been rather blunt about how much needs to be fixed or replaced and the demand that work will create.

As it happens, the funding is locked in, thanks to major US policy acts committing historic dollars to infrastructure, setting up a build-out that could run for years.

PAVE isn’t betting on just one piece of this story. It invests across the full chain, from the companies pulling stuff out of the ground to the ones running the big equipment.

Holdings sit close to the builders, weighted toward industrials and materials. This is a chance to grow with America’s blueprint.

Explore PAVE.

ball street bets

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Why try to figure out how an earnings report will affect a stock when you can figure out how an injury report will affect a sports team? That’s the attitude that some—including a wide swath of Gen Z—are taking when it comes to how to grow their money.

One in five Americans view wagering on sports as an investment tool, and for Gen Z, it’s two in five, according to a recent Bank of America survey.

And they’re acting on those feelings: A Betterment survey of 1,000 investors found that 52% of Gen Zers redirected money intended for investing into sports betting instead. All this is despite the odds and history screaming to do the opposite:

• There’s a fee built into the odds of wagers called a vig. The vig is how sportsbooks ensure they make money, and it turns bets with a 50/50 outcome into one where bettors must put down $110 to win $100, which means even if you win 50% of those bets, you will still lose money long term.
• Meanwhile, the stock market has delivered an average annual weighted return of 10% over the past century, according to research from a professor at Arizona State University’s Carey School of Business.

But what if Gen Z is picking winners? They’re not! Almost no one is! That’s why sportsbooks are billion-dollar businesses, and you’re asking your mom for $20 to load into your FanDuel account. That BofA survey found Gen Z is the most successful sports betting generation by recovering 80 cents for every dollar wagered (that’s still fancy bank-speak for losing).

There’s likely to be more: Football season, which began on the pro and college levels a couple of weeks ago, typically drives more users to place bets. Last season saw a 22% increase in first-time users year-over-year, per BofA.—DL

      

credit curious

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You know your corner of the market has made it to the big leagues when JPMorgan honcho Jamie Dimon cautions that it might bring about the next financial crisis—as he did with private credit earlier this year. Of course, not all the attention private credit has gotten has been negative—or has compared it to a “cockroach,” as Dimon memorably did following the collapse of two private credit-backed firms.

So, what is it? Basically, private credit means loans from investment funds rather than banks. These loans are often riskier than bank loans, so the companies taking them pay more in interest, and the funds typically intend to hold them until maturity.

• Despite its reputation for high risk, the boom in private credit traces back to regulations put in place in the wake of the 2008 financial crisis meant to get banks out of the risky lending game. With banks facing more rules, companies without a big track record or seeking to add on to already large debt needed to turn to someone else.
• Major private equity outfits like KKR, Apollo, and Blackstone turned this lending into a large part of their business.
• The private credit market went from ~$500 billion in the US in 2020 to ~$1.3 trillion as of December 2024, according to Bloomberg. And as the industry grew, private credit firms brought in retail investors.

Private credit, public pain

Private credit works in part because investors are prepared to park their money in these loans for the long haul—but, beginning last year, some investors started to worry and sought to pull their cash.

One fear, besides general macroeconomic concerns, is how tied private credit is to software that AI could make obsolete. Roughly 20% of private credit loans went to software companies, per Axios. But attempts to withdraw funds also created their own doomsday narrative about the private-credit industry, especially as firms like Blue Owl limited withdrawals and sold off assets to pay back investors.

Half full or half empty? Withdrawal requests have since calmed down somewhat, and even Dimon said he doesn’t view the risks as “systemic.” But private credit hasn’t really been tested in a downturn, so some observers view it more optimistically, while others say new risks could still be revealed.—AR

      

Sponsored By GLOBAL X ETFS

The rebuild is bankrolled. US policy acts have committed historic funding to infrastructure, and independent assessments show just how much fixing and replacement is needed. PAVE invests across the spectrum, from raw materials to swinging hammers, weighted toward the industrials and materials companies doing the work. Explore and invest today.

history lesson

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Will your collection of Sillybandz and POGs be able to pay for your kids’ college? Probably not. But that doesn’t mean that collectibles and speculative fads are always a bad investment. Here’s a look at some throughout history that were and some that weren’t.

Tulips: At the height of the Netherlands’ tulip bulb bubble of the 1600s, tulips reportedly rivaled mansions in price, thanks to their then-exotic beauty…and rampant speculation. While some historians doubt whether the bulb bubble was as bulbous as once believed, the market collapsed either way, likely leading florists to plot their next big score: prom corsages.

Railway shares: Nobody was conducting bubble business like the British in the 1840s, when investors like Charles Darwin and the Brontë sisters poured money into speculative railway investments, leading to one of the biggest financial crashes of all time.

Baseball cards: Like a knuckleball, collectible card values are kind of all over the place. Old cards featuring legendary players can bring in millions of dollars, but in the late 1980s and early 1990s, the so-called Junk Wax era, cards were overproduced and their value slid. Now, some fans worry the industry is making some of the same mistakes again.

Beanie Babies: In the late 1990s, you could probably buy a house using a Princess Di bear as a down payment. But Beanie Baby demand isn’t quite what it used to be, and prices have fallen considerably. Some might still be worth more than the typical decades-old stuffed animal, though.

Bitcoin: The OG cryptocurrency is down from its all-time highs last year, but it still spent the past week hovering north of $80,000, a far cry from the $600 it cost 10 years ago. That upward trajectory hasn’t been a straight line, though, with volatility and speculation concerns constantly dogging the crypto.

Non-fungible tokens (NFTs): These digital assets were supposed to change the future of art, media, and plenty of other things through the magic of the blockchain. Per data firm Nonfungible.com, NFT sales jumped from $82 million in 2020 to $17.6 billion in 2021, before crashing down to about $5.63 billion last year, according to CryptoSlam data.—BC

      

wait, what?

Getting your financial future on track…literally

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Want to own part of a horse but hate the smell of glue? Maybe try fractional horse ownership. Companies like Commonwealth and MyRacehorse let you buy a small share of a racehorse for as little as $50 to $100. You get behind-the-scenes updates on your horse’s progress and, if it wins enough, you may get to share in the profits.

Good investment: Yay or neigh? If you’re looking for a return on your money, that will depend on how well you pick horses. Sometimes they hit:

• When Authentic won the Kentucky Derby in 2020, he had ~4,000 co-owners through MyRacehorse.
• In 2023, Mage won, along with nearly 400 of his co-owners via Commonwealth.

But while it’s possible to make money, it’s not exactly…stable income. MyRacehorse and Commonwealth both emphasize that part of what you’re paying for is the fun you’ll have along the way—which probably isn’t how index fund managers pitch their products.—BC

EXPLAIN IT TO THE GROUP CHAT

How to tell if your trading cards are trash or treasure

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It’s finally time to purge those childhood boxes in your parents’ basement, because the trading card market is booming. The companies that assess memorabilia quality are handling more volume than ever, and rare Pokémon and sports cards are breaking auction records with multimillion-dollar sales.

But even if you’re sitting on gold, your card won’t fetch top prices if it isn’t preserved well. Here’s how trading cards get graded on a scale of 1–10, according to quality authorities like the Professional Sports Authenticator (PSA) and the Certified Guaranty Company (CGC):

• To be a 10, your card needs to look essentially flawless. That means all four corners are perfectly sharp, the card’s imagery is centered, its glossy sheen is intact, and there are no stains.
• From there, points will be detucted for even the slightest imperfections. Your card might not score above an eight if it has two or more minor flaws—like a stain on the backside—and even one wonky corner could knock your rare Charizard down to a six.
• Don’t bother with buffing out blemishes. Companies including PSA won’t grade altered cards.

Meanwhile…fraudsters are trying to ride the collectibles market’s coattails. The percentage of overall card submissions that turned out to be counterfeit spiked by 250% last year, according to PSA.—ML

domain expert

Web addresses can be worth more than IRL ones

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Unlike flipping homes, investing in digital addresses never involves dealing with surprise termite infestations. Website domain name flipping has been around since the 1990s, when businesses began paying top dollar for URLs that made them easy to find on the fledgling internet.

Successes can be wildly lucrative: Cars.com became the most expensive domain in history after it was sold to the media company Gannett Group in 2014 for a record $872 million. Some investors go for that kind of timeless web address—like Vodka.com, which Russian Standard bought for $3 million in 2004—but many domain flippers also try to get on the ground floor of a rising trend like an emerging technology.

The market for AI domains is booming:

• A Malaysian entrepreneur named Arsyan Ismail sold AI.com this year to the founder of Crypto.com for $70 million. Islamil said he registered it as a 10-year-old in 1993 because it matched his initials, but some sources claim he bought it in 2021 for $10 million.
• Bot.ai fetched $1.2 million on the domain auction platform Sedo this year.
• The number of registered websites with domains ending in .ai has gone up tenfold to 1 million in the last five years.

The .ai frenzy is certainly paying off for…the tiny Caribbean island nation of Anguilla (population ~15,000), which owns the .ai domain code. The country made $39 million selling .ai website registrations in 2024, which accounted for almost a quarter of its government’s revenue.—SK

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ICYMI, use your Sunday morning to get caught up on some of our most-clicked recent recs:

• How to claim your share of Apple’s $250 million iPhone settlement.
• The books Goodreads users can’t wait to get their hands on this fall.
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• Adjustable dumbbells for a home gym without space to spare.**

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