Joshua Chapin, Financial Advisor, Explains How Breakwater Capital Helps Clients Diversify Through Alternative Asset Classes
Investors who have spent years relying on stocks and bonds are starting to question whether those tools alone can carry them through today’s market conditions. Volatility, shifting interest rates, and growing tax considerations have pushed many to look beyond traditional approaches, even if they are unsure where to begin. Joshua Chapin, financial advisor and President […]
Investors who have spent years relying on stocks and bonds are starting to question whether those tools alone can carry them through today’s market conditions. Volatility, shifting interest rates, and growing tax considerations have pushed many to look beyond traditional approaches, even if they are unsure where to begin.
Joshua Chapin, financial advisor and President of Breakwater Capital, works with accredited investors at that stage.
Many are over the age of 55 and already hold significant positions in real estate or the stock market. He helps them understand what options are available and how those options fit into their broader financial goals.
“We help educate clients on and provide access to investments and tax mitigation strategies that most other advisors cannot,” Chapin said.
At Breakwater Capital, alternative investments are introduced as part of a strategy to reduce reliance on public markets, create additional income opportunities and support long-term growth.
Why Diversification Means Something Different for Today’s Investors
Many of the investors who come to Breakwater Capital are not new to investing. They have spent decades building wealth through stocks, bonds and real estate and have a deep understanding of how those markets work.
As they get older, their priorities change and so does what they need from their portfolio.
For some, that means managing capital gains or reducing tax exposure. For others, it means generating consistent income or limiting how much their portfolio moves with the market. In many cases, it’s a combination of all three.
For example, an investor selling a property may face a significant capital gain and use a 1031 exchange to defer taxes while reinvesting into income-producing assets.
That’s where traditional diversification can start to fall short. A portfolio built around stocks and bonds may still be important, but it doesn’t always address these evolving needs.
Stocks can be unpredictable, bonds may not provide sufficient income, and, during periods of volatility, both can move in the same direction, which reduces the effectiveness of diversification.
Alternative investments can help address those limitations.
“Alternatives are a way to mitigate market risk and gain exposure to assets that do not correlate with the broader economy,” Chapin explained.
Instead of adding more of the same types of investments, investors start including options that behave differently, like private real estate or other strategies that are not tied to the stock market.
These types of investments are not meant to replace traditional holdings, but to complement them. When used thoughtfully, they can help generate additional income, reduce overall volatility and create more flexibility around tax planning.
For many investors, this shift is not about chasing new opportunities, but building a portfolio that better reflects where they are today and what they need going forward.
What Alternative Asset Classes Look Like Inside a Portfolio
The term “alternative investments” can feel abstract, especially for investors who have spent most of their time in public markets. At Breakwater Capital, the focus is on showing how these investments work within a real portfolio.
Alternative investments can include private equity, real estate, hedge strategies, and venture investments.
The firm most often works with institutional real estate, including Delaware Statutory Trusts and private placements, along with tax-advantaged strategies such as 1031 exchanges, bonus depreciation, and Opportunity Zones.
These options allow clients to diversify into assets that can generate income and are not directly tied to daily market movement.
Joshua Chapin, financial advisor, has spent years working in this space, leading more than 200 seminars on 1031 exchanges and alternative investing. When introducing these strategies to clients, he helps them understand the role each investment is meant to play in their portfolio.
“Early in my career, I saw how traditional portfolios often fall short when it comes to tax efficiency, income stability, and real diversification,” he said.
That realization led him to focus on investments that could address those gaps. As he gained more experience, he found that alternatives, particularly real estate, can make a portfolio more stable when used the right way.
“My perspective has shifted from viewing alternatives as “opportunistic” to viewing them as strategic planning tools,” he said.
How Breakwater Capital Screens and Selects Alternative Investments
Not every alternative investment is a fit for every client. At Breakwater Capital, the process starts with understanding the person first, not the product.
Each relationship begins with a discovery meeting where they learn about the client’s income needs, timeline, access to cash, tax situation, and past investing experience. This includes a close look at liquidity needs, risk tolerance, and long-term objectives.
Only after that does the firm look at specific opportunities.
“A risk-managed framework means starting with risk first, return second,” Chapin explained.
That means evaluating how an investment may perform in different market conditions before considering potential returns. This includes reviewing the sponsor’s track record, capital structure, underlying assumptions and potential downside scenarios, as well as legal and tax considerations.
Chapin works closely with sponsors, attorneys, CPAs, and other industry professionals as part of the due diligence process, ensuring each opportunity is thoroughly vetted before it is ever presented to a client.
Alternatives are introduced gradually, with position sizes kept conservative. The goal is to add balance, not change what is already working.
Clients are also provided with detailed information and disclosures so they understand how each investment works and what risks are involved before making any decisions.
Education First: Helping Clients Understand What They Own
Access to investments is only part of the process. Understanding how and why they are used is just as important. Education is an ongoing part of the client relationship at Breakwater Capital, especially when it comes to risk.
“We always have conversations about the various risks involved in specific investments throughout the investment process,” Chapin noted.
Clients are encouraged to ask questions, review information carefully and take the time they need before moving forward. This ensures that they fully understand what they are investing in rather than just following a recommendation.
“A well-designed regulatory framework exists to ensure that recommendations are suitable, well-disclosed, and aligned with a client’s profile,” he said.
He views compliance not as a constraint, but as a structure that reinforces transparency and accountability. Recommendations are evaluated through multiple lenses, ensuring that each strategy aligns with both the client’s goals and industry standards.
By working within those standards, Breakwater Capital is able to tailor strategies to individual clients while maintaining consistency and transparency.
Clients also receive complimentary annual reviews and have direct access to Chapin when they need guidance. This creates an ongoing relationship, rather than a one-time transaction.
“I treat my clients’ money as if it were my own and also invest alongside them in most of the firms that we work with,” he said. “I pride myself on having close relationships with many of them and being very responsive and attentive when they reach out with questions or any other needs.”
Building Portfolios That Can Withstand Uncertainty
When markets become uncertain, many investors try to predict what will happen next. Breakwater Capital takes a different approach, focusing on preparation for different outcomes instead of relying on forecasts.
That preparation starts with how portfolios are built. Portfolios are designed to include investments that do not all respond the same way to changing conditions.
Even if one area becomes more volatile, another may hold its value or continue generating income. This helps reduce how much any single shift affects the overall portfolio.
“Volatility reinforces the importance of discipline,” said Joshua Chapin, financial advisor at Breakwater Capital.
Discipline means sticking to a long term plan and not reacting to every market swing. Investments at Breakwater Capital are not driven by short-term trends, but by how they fit into the client’s strategy.
“We do not just provide a list of available investments or only focus on one type like some of our competitors,” Chapin noted.
For investors looking for that kind of guidance, Breakwater Capital offers a more thoughtful way to approach diversification, helping clients make intentional choices while building stronger, more resilient portfolios.