The recommended allocation to alternative assets (such as private credit) in a financial portfolio can vary depending on your goals, risk tolerance, investment horizon, and overall financial situation.
Example Allocations
To get a sense of the range you might consider allocating to alternatives, institutional investors like pension funds, hedge funds, and asset managers allocate 3-30% of their investments to private credit. A conservative approach might be on the low end of that range, and an aggressive approach might be on the high end.
Here are some examples:
Conservative: 5% to 10% in alternatives.
Moderate: 10% to 20% in alternatives.
Aggressive: 20% to 40% in alternatives.
It's important to note that these are general guidelines and individual circumstances will vary. Investors should consult with a financial advisor to determine the most appropriate allocation to alternative assets based on their specific financial situation, goals, and risk tolerance.