One of the keys to reducing risk but maintaining strong returns is diversification. Lots of Australian investors have a lot of exposure to banks, healthcare companies and perhaps technology shares, yet not much exposure to businesses outside this sphere.
There are some great businesses in unique areas which are worth considering, such as these:
Sydney Airport Holdings Ltd (ASX: SYD)
Sydney Airport Holdings is the company that operates Sydney Airport, a unique asset in Australia.
The main international airport hub of Australia is experiencing solid results thanks to the growth of international passengers. In its latest passenger update for August 2017 it updated the market to say that international passengers had grown by 8.3% compared to August 2016.
Sydney Airport has a good mix of defensive earnings, growth and a solid dividend yield.
It's currently trading at 40x FY18's estimated earnings with an unfranked dividend yield of 4.58%.
InvoCare Limited (ASX: IVC)
InvoCare is the market-leader of funerals in Australia. It's a unique business on the ASX and has a lot of growth potential.
The ageing demographics of Australia will sadly lead to more people needing funerals, it could be quite the booming industry over the next two decades.
InvoCare is one of the most defensive businesses in Australia and is well worth a place in most portfolios in my opinion.
InvoCare is currently trading at 27x FY18's estimated earnings with a grossed-up dividend yield of 3.98%.
Freelancer is owner of one of the largest freelancer websites in the world.
The growth of internet usage across the globe is creating a huge market for people with projects looking to find a freelancer to work with them.
The fall in the share price down to 46 cents offers a tempting price. Freelancer isn't yet making a profit.
Foolish takeaway
The above businesses would all make strong additions to a portfolio. InvoCare and Sydney Airport are both trading expensively and Freelancer is a high-risk, high-reward choice. I'm not sure I'd be a buyer of any of them at the current prices.
