“This is like the internet on steroids. And we’re still in the second or third inning.”

That quote came from Scott Ladner, chief investment officer at Horizon Investments, and it’s been circulating in financial circles all week. He meant it as bullish commentary. But for anyone who was investing in 1999, the internet-steroids analogy carries more weight than maybe he intended.

The dot-com bubble didn’t burst because the Internet was a bad technology. The internet was transformative — it changed everything. The problem was valuation. Companies with no earnings, no clear path to profitability, and no moat got priced as if they’d already won. When reality reasserted itself in 2000, the correction was brutal. The technology survived. Most of the stocks didn’t.

That’s the context in which smart alternative allocations become genuinely important — not as a bet against AI, but as a hedge against a valuation cycle that may be running hot.

Where Are Investors Looking In Alternatives Right Now?

Energy infrastructure is having a moment. Oil crossing $100 per barrel with no quick resolution to the Strait of Hormuz situation has made midstream energy infrastructure — pipelines, storage, processing facilities — suddenly very interesting. These assets don’t necessarily benefit from high oil prices the way drillers do, but they benefit from volume — the need to move energy regardless of price. With shipping disruptions forcing rerouting through longer routes, domestic energy infrastructure that was built for exactly this kind of scenario looks compelling. Pipeline MLPs (Master Limited Partnerships) have historically offered strong yield and relatively low correlation to tech-driven equity moves.

Real assets and commodities. The April CPI data due Tuesday is expected to show headline inflation at 0.6% for the month — that’s 7.2% annualized if it holds. Real assets — gold, commodities, and real estate investment trusts with pricing power — tend to hold up better in inflationary environments. Gold specifically has been a quiet performer; with the dollar under pressure from geopolitical uncertainty and oil-driven inflation, it warrants more portfolio attention than it typically gets when everyone is transfixed by AI stocks.

Private credit. This one requires accreditation, but for qualified investors, private credit has emerged as one of the more compelling alternatives of the past several years. With base rates still elevated, direct lending to middle-market companies is generating yields that fixed income portfolios simply can’t match with investment-grade bonds. The key risk is illiquidity — you can’t sell it on a Tuesday when the market drops. But for investors with long-term horizons who don’t need that liquidity, the yield premium over public credit is hard to ignore.

Volatility as an asset class. The VIX closed at 17.19 last Friday — not high in absolute terms, but elevated enough that structured volatility strategies have become interesting. The spike in call-buying activity mentioned by market analysts suggests implied volatility could rise further, particularly around binary events like the China summit and the upcoming CPI and PPI prints. Long volatility positions — via VIX futures, variance swaps for institutional players, or simpler ETF structures — can serve as genuine portfolio insurance right now at a cost that isn’t excessive.

The diversification reality check. One of the things the current rally has quietly done is wreck diversification for a lot of portfolios. When five stocks drive more than half the S&P 500’s gains, a “diversified” index fund is actually a concentrated tech bet. Investors who haven’t looked at their actual factor exposures lately may be surprised. A portfolio that is nominally in “large cap blend” may be 30% or more in AI-adjacent names when you drill down. That’s not diversification. That’s concentration with extra steps.

The alternatives conversation isn’t about being bearish. It’s about recognizing that when the market’s leadership is this narrow, and when the macro backdrop includes a war driving oil prices and an inflation reading that will set the tone for rate expectations, having exposure to things that don’t all move in the same direction as Nvidia is worth more than it sounds.

The internet really was transformative. The investors who did well in the decade after the dot-com crash weren’t the ones who gave up on technology — they were the ones who held real assets, value, and international exposure during the years it took for tech to grow into its valuations. We may be setting up for a similar period. Preparing for it now isn’t pessimism. It’s just portfolio management.