Young investors are reshaping the investment landscape by pouring money into alternative assets at rates their parents never considered. Alternative investments now make up about 20% of millennials’ portfolios on average, compared to just 11% for Gen X and 6% for Boomers, according to CNBC. The shift is not subtle. Bank of America’s 2024 Private Bank Study found that wealthy investors aged 21 to 43 hold only 25% of their portfolio in traditional stocks, compared to 55% for those over 43. The rest is going into crypto, real estate, collectibles, private equity, and yes, things like high-grade Pokemon cards.
This generational pivot is driven by a combination of skepticism toward traditional markets, a desire for tangible or novel assets, and unprecedented digital access to investment platforms. The global alternative investment market is projected to reach $26.4 trillion in 2025, up from an estimated $13.32 trillion at the end of 2021. That growth is not happening in a vacuum. It is being fueled by younger investors who started earlier, think differently about risk, and see opportunity where older generations see speculation. This article breaks down the numbers behind the shift, examines what young investors are actually buying, explores where collectibles like Pokemon cards fit into the picture, and looks at what regulatory changes mean for the future.
Table of Contents
- Why Are Young Investors Turning to Alternative Assets Over Traditional Stocks?
- Cryptocurrency and Digital Assets Are Leading the Charge
- Where Do Collectibles and Pokemon Cards Fit in the Alternative Asset Landscape?
- Building a Balanced Alternative Portfolio as a Young Investor
- Risks and Limitations Young Investors Should Not Ignore
- How Regulatory Changes Are Opening Doors for Alternative Investments
- What the Future Looks Like for Young Investors and Alternative Assets
- Conclusion
- Frequently Asked Questions
Why Are Young Investors Turning to Alternative Assets Over Traditional Stocks?
The short answer is that young investors do not trust the stock market to deliver what they need. After growing up through the 2008 financial crisis, a pandemic-era market rollercoaster, and persistent inflation, many millennials and Gen Z investors view the classic 60/40 stock-bond portfolio as a relic. Bloomberg reported that alternatives and crypto now comprise 31% of younger investors’ portfolios, versus only 6% for older investors. When asked why, 54% of millennial investors cited access to growth industries as the primary driver, more than double the 27% who pointed to diversification. There is also a timing factor at play.
Fifty-four percent of Gen Z began investing by age 21, compared to 31% of millennials and 27% of Gen X. Starting earlier means more time to experiment with nontraditional asset classes and more comfort with volatility. A 22-year-old who puts money into a fractional Pokemon card investment or a crypto position has decades to recover if it goes sideways. That math changes at 55. The result is a generation that treats alternatives not as exotic side bets but as core portfolio holdings. Ninety-three percent of young high-net-worth investors told Bank of America they plan to increase their allocation to alternatives in the coming years.
Cryptocurrency and Digital Assets Are Leading the Charge
Crypto remains the most visible alternative asset among young investors. Wealthy young Americans allocate 15% of their portfolios to cryptocurrency, compared to just 2% for the older generation. Twenty-nine percent of wealthy investors aged 21 to 43 say crypto offers the greatest growth opportunities, versus only 7% of older investors. Digital assets now represent 12.4% of the broader alternative investment market in 2025, and institutional adoption is accelerating. At least 172 publicly traded companies held Bitcoin by Q3 2025, up 40% quarter-over-quarter, according to Grayscale. However, enthusiasm does not equal blind confidence.
Sixty-five percent of Gen Z investors plan to invest in crypto in 2025, but 84% of them simultaneously view it as risky. That tension is important. If you are a young investor drawn to crypto because of its upside, you should understand that volatility cuts both ways. The coins and tokens that tripled last year can lose half their value in a week. This is why many financial advisors recommend treating crypto as one slice of a diversified alternative portfolio rather than the whole pie. The same logic applies to any speculative collectible, whether it is a first-edition Base Set Charizard or an NFT. The potential is real, but so is the risk of buying at the top of a hype cycle.
Where Do Collectibles and Pokemon Cards Fit in the Alternative Asset Landscape?
Collectibles occupy a unique space in the alternative investment world because they combine financial potential with genuine personal interest. The broader collectibles market, including trading cards, sports memorabilia, fine art, and vintage items, has attracted serious attention from young investors who grew up with these objects. Pokemon cards are a prime example. A PSA 10 first-edition Base Set Charizard sold for over $400,000 at auction, and even mid-tier vintage cards from the late 1990s and early 2000s have appreciated significantly over the past five years. For collectors who already understand grading scales, set rarity, and market trends, the leap from hobby to investment is a short one.
The appeal is partly emotional and partly strategic. Unlike a stock ticker, a graded Pokemon card is something you can hold, display, and enjoy while it appreciates. Forty-five percent of wealthy young investors already own physical gold, and another 45% are interested in holding it, according to Bank of America. That desire for tangible assets extends naturally to collectibles. Tokenized real-world assets, which include fractionalized ownership of physical items like trading cards and art, stand at roughly $33 billion in 2025, with forecasts projecting growth into the trillions by 2030. Platforms that let you buy fractional shares of a sealed Pokemon booster box or a high-grade card are turning what was once a hobby into a legitimate portfolio position.
Building a Balanced Alternative Portfolio as a Young Investor
The biggest mistake young investors make with alternatives is concentration. Putting 30% of your portfolio into a single asset class, whether it is crypto, Pokemon cards, or private equity, amplifies risk in ways that defeat the purpose of diversification. A more measured approach is to spread alternative allocations across several uncorrelated categories. For example, a young investor might hold 5% in crypto, 5% in collectibles, 5% in real estate crowdfunding, and 5% in private credit. The global private credit market surpassed $1.5 trillion at the start of 2024 and is projected to reach $2.6 trillion by 2029, making it one of the fastest-growing institutional alternatives available. The tradeoff is liquidity versus return.
Publicly traded stocks can be sold in seconds. A graded Pokemon card might take weeks to find the right buyer at the right price. Private equity investments often lock up capital for years. Twenty-six percent of millennials expressed interest in increasing exposure to private equity, and 22% showed interest in direct investments, according to CNBC, but these vehicles typically require patience and higher minimums. Real estate, which 31% of younger wealthy investors say offers the greatest growth opportunities, falls somewhere in the middle depending on whether you are buying physical property or investing through a REIT. Every alternative asset comes with its own liquidity profile, and understanding that before you buy is more important than chasing the highest projected return.
Risks and Limitations Young Investors Should Not Ignore
Alternative assets are not inherently better than traditional investments. They are different, and different carries its own set of problems. Most alternatives lack the transparency and regulation of public markets. When you buy a stock on the NYSE, you benefit from decades of securities law, audited financials, and real-time pricing. When you buy a vintage Pokemon card as an investment, you are relying on grading company consistency, auction house integrity, and market sentiment that can shift quickly based on YouTube influencer activity or a surprise reprint announcement. Valuation is another persistent challenge.
The Bank of America report showing retail clients holding alternative assets has more than doubled since 2020 reflects genuine demand, but demand alone does not make something a good investment at any price. The Pokemon card market experienced a significant correction in 2022 after the pandemic-era bubble, with many cards losing 30% to 50% of their peak value. Cards that were fundamentally scarce and desirable recovered. Cards that were inflated by hype did not. The same dynamic plays out in crypto, NFTs, and speculative real estate. If you cannot articulate why an asset has value beyond “it went up last year,” you are speculating, not investing.
How Regulatory Changes Are Opening Doors for Alternative Investments
The regulatory environment is shifting in ways that will make alternatives more accessible to everyday investors. A presidential executive order in August 2025 pushed regulators to make it easier for 401(k) plans to include alternative investments, which could funnel retirement savings into asset classes that were previously reserved for the wealthy. The GENIUS Act passed in 2025, and the Clarity Act is expected in 2026, both of which are reshaping the regulatory landscape for digital assets.
In September 2025, Merrill and Bank of America Private Bank launched a new alternative investments program for ultra-high-net-worth clients, signaling that major institutions see long-term demand. For Pokemon card investors and collectors, these macro-level changes matter more than they might appear. As alternative assets gain institutional legitimacy, the infrastructure around them improves. Better custody solutions, more transparent marketplaces, and standardized valuation methods benefit anyone holding physical or digital collectibles as part of an investment strategy.
What the Future Looks Like for Young Investors and Alternative Assets
The trajectory is clear. Young investors are not going to revert to the portfolios their grandparents held. The combination of early investing habits, digital-native comfort with new platforms, and genuine disillusionment with traditional finance has created a structural shift. As tokenization matures, the line between traditional and alternative assets will blur further.
A Pokemon card collection, a real estate portfolio, and a crypto wallet may all live on the same platform within a few years, each represented as a digital asset with real-time pricing and instant liquidity. The question is not whether alternatives will remain popular with young investors. It is whether the infrastructure, regulation, and education will keep pace with demand. The investors who do best in this environment will be the ones who treat alternatives with the same rigor they would apply to any investment: researching fundamentals, understanding risks, diversifying across asset types, and resisting the urge to chase whatever is trending this week.
Conclusion
The rise of alternative assets among young investors is not a fad. It is a measurable, data-backed generational shift in how wealth is built and preserved. With alternatives comprising 20% or more of millennial portfolios, a $26.4 trillion global market, and 93% of young high-net-worth investors planning to increase their allocations, the trend has real momentum. Pokemon cards, crypto, real estate, private credit, and physical gold are all part of a broader redefinition of what a portfolio looks like in 2025 and beyond.
For collectors and investors in the Pokemon card space, the takeaway is that your hobby sits squarely within a legitimate and growing asset class. The same forces driving young people toward crypto and private equity are driving them toward graded cards and sealed product. The key is treating it seriously: understanding market cycles, avoiding concentration risk, and recognizing that not every card or collectible is an investment-grade asset. Do the research, diversify thoughtfully, and remember that the best investment is one you actually understand.
Frequently Asked Questions
Are Pokemon cards considered alternative investments?
Yes. Pokemon cards fall under the broader collectibles category within alternative investments. Graded vintage cards, sealed product, and rare promos have demonstrated price appreciation over time, though they carry unique risks including condition sensitivity, market sentiment swings, and liquidity constraints that stocks do not have.
What percentage of their portfolio should young investors put into alternatives?
There is no universal answer, but most financial advisors suggest keeping alternative allocations between 10% and 25% of a total portfolio. Millennials currently average about 20%. The right number depends on your risk tolerance, liquidity needs, and how well you understand the specific assets you are buying.
Is crypto a good alternative investment for beginners?
Crypto offers significant growth potential but comes with substantial risk. Sixty-five percent of Gen Z investors plan to invest in crypto in 2025, yet 84% acknowledge it is risky. Starting with a small allocation and educating yourself on the technology and market dynamics is more prudent than going heavy based on price momentum alone.
How do collectibles compare to real estate as alternative investments?
Real estate generally offers more predictable income through rent and has a longer track record of appreciation. Collectibles like Pokemon cards can appreciate faster during bull markets but are more volatile and less liquid. Thirty-one percent of young wealthy investors view real estate as the top growth opportunity, while collectibles appeal more to those with domain expertise and personal interest in the items.
Will alternative investments become available in retirement accounts?
The trend is moving in that direction. A presidential executive order in August 2025 directed regulators to explore making it easier for 401(k) plans to include alternative investments. If implemented broadly, this could significantly expand access to alternatives for everyday investors, though details on eligible asset types are still being worked out.
