In the past, stock market equities and bonds used to react differently to market changes — going up and down at different times. Older investment models rely heavily on this as a way to diversify portfolios.

But rising inflation, increased market volatility and longer life expectancies have meant equities and bonds have started reacting more similarly to markets – so they don't provide the diversification they once did.

So, to diversify investments, exposure to private markets and liquid alternatives is important. These additional investment types help provide higher potential returns and add more protection from inflation, and the short-term ups and downs.