Although the incorporation of alternative assets into retirement portfolios is increasing, it is far from matching its proportional share of most American's taxable portfolios. As result, retirement portfolios are very vulnerable to market or "systematic" risk. This risk can destroy an individual's retirement savings as evidenced by the collapse of Enron and its pension plan. More consideration needs to be given by financial advisors and asset managers to balance their clients' retirement portfolios by adding alternative and non-correlated asset classes. This increased diversification helps hedge against market risk and reduces the expected variability of investment returns. Why? Different asset classes are expected to respond to fundamental economic forces in varying ways.

Today, some financial advisors and asset managers see the merit in reducing the concentration of equities in clients' portfolios as the stock market fluctuates wildly. The traditional theories and ideas about investment portfolio diversification are often discounted or dismissed when markets rise. However, the uncertainty and volatility in today’s markets are causing some financial advisors and asset managers to recommend an increase in the usage of alternative investments to protect retirement accounts and other investment portfolios. This trend toward greater diversification is increasing and encouraging for all Americans.