Investing is an increasingly popular option for many people in the modern economy and the technological and regulatory changes that have transformed the financial industry in the last few years have made it easier than ever for all of us to invest.
But where do you start? There are many things to consider when you’re planning to invest, and you should always seek financial advice, but one strategy that can improve your chances of success is to become a niche investor. By becoming an expert in one particular sector of the economy, you will be better placed to rate the companies operating in that space, enabling you to make shrewder investment decisions. Here are four sectors that could be good niche investment areas.
Fitness and Weight Loss
The weight-loss sector has been around for decades, and, just as people will always need to get their hair cut, it seems that people will always be searching for ways to shed a few pounds. From Weight Watchers to Atkins to the Paleo Diet, this sector is continually renewed with new ideas and new companies supporting each wave of dieting concepts. But whether you try to capitalise on the latest diet trend or opt to invest in one of the longer established players in the market, it remains one of the most enduring niche sectors to invest in and is big enough to support a wide array of companies.
Overlapping with the weight loss industry is the fitness and health sector, which these days is about more than alternative health treatments, although those remain popular. Increasingly, medical technology is becoming accessible to the general public and there is a booming interest in home testing and treatments, including everything from blood pressure monitoring equipment to urine testing kits. With the majority of people in the UK relying on the NHS, which lacks the resources to invest in preventative medicine, this sector is likely to grow over the coming years.
Pet Care
Another enduring aspect of our society is the popularity of pets. Tastes and fashions change, but it seems that we will always want to have pets in our homes. Whether that’s the traditional cat or dog or the more exotic and adventurous range of pets such as snakes or lizards, the popularity of pets has not waned over the decades and that has led to a huge pet supply and pet food market.
The variety of product and service in this sector is bigger than you might think. There are pet food suppliers catering for every animal, from spiders to dogs, and you can buy pretty much anything for your beloved pets from gourmet and health food to snacks and treats. Then there is the range of equipment: cages, toys, grooming accessories along with the educational products including training advice, pet care guides and manuals. This is one sector of the economy that seems to be going from strength to strength and which could reward the niche investor.
Logistics
The logistics sector is the lifeblood of the global economy. Without logistics companies ensuring that goods get to markets and supplies reach manufacturers, no sector would be able to function. Logistics covers everything from road haulage to maritime transport where well-known shipping magnates such as Evangelos Marinakis run huge fleets of transport vessels that help to keep the European and global economies running smoothly.
And the logistics sector is currently going through a period of significant growth, fuelled by both economic growth and consumption. GDP in the Euro Area grew by 2.37 per cent in 2017 and a similar figure in 2018, while consumption accounted for almost 60 per cent of GDP during 2017, with online retail depending increasingly on the ability to transport goods over long distances as quickly as possible. Technology will continue to shape the logistics sector, as will the state of the global economy and political upheaval, but logistics will continue to be an essential component to overall human prosperity and therefore remain an interesting possible niche investment market.
As with any endeavour that involves financial commitments, investing your hard-earned money is not something that should be done lightly, and it is vital to do your homework and take advice before you start. But there is no doubt that specialising in niche markets is one investment strategy that can produce good results, and the sectors discussed above all have the potential to bring rewards for the shrewd investor over the short and long term.
