Investing outside the box — 3 diverse tactics

A conventional approach to investment might involve creating a portfolio that delivers a return against an agreed target and that’s invested across equities and bonds.

And it may include a range of funds or focus on specialist asset categories like commodities or construction.

It’s always best to look before you leap and seek the professional advice of a wealth manager, but niche investments can be lucrative.

If you want to invest outside the box, here are three diverse tactics.

  1. Impact investing

For some investors, generating maximum returns isn’t the only consideration when picking the best places to plunge their cash — they want to back businesses that align with their worldview and provide genuine social and environmental benefits.

This phenomenon is called ‘impact investment’ and has become more influential over the past few years — according to The Economist, BlackRock, Goldman Sachs and Bain Capital have all either created their own impact divisions or acquired firms that already specialise in the niche.

There’s been some industry speculation that such a strategy particularly appeals to young investors who prefer companies that further equality and have good ecological credentials.

But impact investing can attract those from all walks of life, with products like eco-friendly flip-flops having cross-generational appeal.

  1. Technical firms

Keeping a keen eye on sectors that are soon to enjoy an injection of government funding might reveal the best companies to invest in going forward.

For instance, in late 2017 the UK government announced a further £725 million investment in the industrial strategy challenge fund — with a focus on construction, health and energy efficiency.

And although the most obvious choice for investors might be stocks and shares in major players who secure long-term public contracts, backing subcontractor firms that supply everything from catenary wire to personal protective equipment might be a better bet — provided they’re listed.

Any niche firm that provides unique products is in a good position to be profitable, so it’s worth keeping an eye out.

  1. Equity crowdfunding

Venture capital was once the exclusive arena of those with the biggest bucks to spend.

But equity crowdfunding platforms have provided more modest investors with the chance to connect with exciting emerging companies that have high growth potential — you can often test the water with an initial outlay of as little as £10.

These are often startups or businesses in their early years, but they often deliver impressive results — producing award-winning wine and beer or breaking barriers in 3D printing, to provide just two examples.

If you’ve got a keen eye for business potential, you might end up making a pretty penny from the next Facebook or Google — anything’s possible.

There’s a risk associated with any investment, so don’t dive in without getting the best professional advice possible.

But these three diverse tactics might help you turn a profit while investing outside the box.

Do you invest unconventionally? Share your thoughts in the comments section.