Fitting Niche Investing Into Your Portfolio

Written By Mary Beth Eastman
Last updated March 22, 2018

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March 22, 2018

Simple. Thrifty. Living.

Niche or theme investing has increased in popularity in recent years, offering large and small investors a chance to diversify their portfolios and, in many cases, reduce their financial risk. Like any form of investment, these stocks offer opportunities and risks. Before diving into the niche market, you need to understand exactly what it is and how best to invest in it.

Niche or theme investing means putting your money into a very specific area of the market. You might decide to invest in cybersecurity, for instance, an area that tends to spike after the latest big-time hack on a bank or other large business. If you are an expert in a certain industry, such as real estate, you may want to invest in things that reflect your area of expertise. Niche investment opportunities are currently being touted everywhere, so you need to be selective. An app such as Motif can help you effectively participate in this market (check out our Motif review here).

Niche investing can help you diversify your current portfolio, and when things go well, you can see impressive profits. The smaller your investment niche is, the less competition you will have. That means you can acquire the investments you really want and not have to settle for lesser offerings. Also, investing becomes more interesting and profitable when you pursue an area of particular interest to you.

Niche investment works when you don’t invest too heavily in single stocks. This strategy is meant to be a small portion of your overall investment plan. If you pour too much money into your chosen niche, you expose yourself to some truly harmful losses. A single industry can see a quick reversal of fortune, so be cautious. Niche investing can work for you if you approach it carefully and use it to diversify and not specialize. You are certainly informed in several industries, so use your specific knowledge to buy these theme stocks. Seek advice and use an application like Motif or another online investing site for the best results. You can find niche investing a satisfying and profitable enterprise.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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