You’ve built, inherited, or sold your way to or near the million-dollar mark. Now comes the harder part: what to do next.
Wealth is harder to grow and protect than it looks. The old playbook of traditional portfolios (a mix of shares and bonds), KiwiSaver and/or property might not be enough to grow and protect your wealth today. Markets are unpredictable, inflation erodes value, and property – while often see as a safe bet – is illiquid, can be slow to realise, and increasingly vulnerable to disruption. The question every savvy investor should be asking is: What’s the smarter path forward?
Why traditional choices may not cut it
For years, traditional portfolios, KiwiSaver accounts, and property have been considered safe bets. But times have changed.
- Bonds, a backbone of old-school portfolios, no longer deliver the cushion they once did. Interest rates have fallen for decades, so bonds no longer reliably balance market dips. In tough periods like 2022, bonds and shares both lost money, breaking that ‘safety net’.
- Property isn’t the sure thing it once seemed. Growth has slowed, the costs of ownership are climbing, and it’s harder to sell quickly if you need cash. Falling rents and shifting population trends mean property’s risk profile has changed.
- KiwiSaver is useful for retirement savings, but it comes with limits; money is locked up, returns largely mirror the market, and there’s little wiggle room if your goals or market conditions change.
These shifts leave many investment portfolios exposed to bigger swings, especially when global share prices are valued so high. If shares are expensive today, future returns are likely to disappoint.
How alternatives can change the game
Alternatives, once the domain of big institutions and the ultra-wealthy, are now accessible to individual investors. Private credit, hedge funds, infrastructure, commodities, and private equity are designed to play a different game, and because they follow their own cycle, they can steady your portfolio when traditional assets stumble. The benefit?
- Alternatives can help smooth out market bumps. If one part of the market stumbles, alternatives can keep your portfolio steady because they don’t move in lockstep with shares or property.
- Diversification is more than just mixing shares and bonds. Real-world portfolios built from a mix of alternative investments have shown stronger, more reliable growth, often protecting capital when the headlines are scary.
The chart below compares our clients’ average performance during major global equity declines (as measured by the MSCI World Index) over the past 20 years. The more traditional 60/40 Balanced Index benchmark is provided for comparison. As you can see, alternative investments provided better protection of wealth during these events, and in some cases experience growth even as headlines turned negative. Read more about our performance here.
Comparison of average performance during major global equity declines 
Questions to ask before you invest
Today’s investment world isn’t like your parents’. Following the crowd rarely leads to long-term success, especially with so many options available.
Here are four smart questions for every investor:
- Are there investment types I haven’t explored, and have I really researched what alternatives could offer?
- What could happen if shares take a tumble, will my portfolio protect me or leave me exposed?
- How have my current investments performed, compared to similar options and the overall market?
- Is my advisor adding value? Are they introducing you to new opportunities and helping you navigate market changes?
Getting informed and making decisions with confidence is key, and you don’t need to figure it out alone.
Our approach
At Saxe Coburg, our clients’ portfolios don’t chase the index or the biggest gains. In strong markets, they might grow more gradually, but with less risk. In downturns, as in the chart above, protecting your wealth is the priority, even if everyone else is losing ground.
Over the past few decades, our clients’ portfolios have weathered global market dips with fewer losses, balancing growth, and stability. This means results don’t match the news cycle; it means your investments stay focused on the goals that matter to you.
Your next step
If you’re questioning the old rules, you’re not alone. Alternatives give next-gen investors a smarter way to grow and protect wealth for the long term.
Not sure if your investments are working hard enough? We’ll help you find out. Get in touch today to explore smarter options and set your next investment move in motion.