Virtually everyone asking for investment advice wants two things – the best possible return with the least possible risk. But what about those who do want to take a risk? What is there out there for them?

Risk is such a subjective word. For some, risk is a premium bond, as they provide that element of “flutter” to sit alongside the certainty that they will not lose their face value. For others, even placing a bet on a single horse is not sufficient risk, as the plethora of trebles and yankees staked in betting shops up and down the land every Saturday afternoon will testify. The lemming-like rush into technology stocks at the end of the 90s was akin to a toddler picking up a glowing sparkler on Bonfire Night. The ensuing pain is a harsh way of ensuring that the same mistake is not repeated.

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When it comes to our savings, most of us find it hard to countenance the possibility of simply throwing money away through a silly investment, and choose instead to invest perhaps a little more cautiously than we sensibly should. Cash is great for ensuring that our capital remains intact, but we shouldn’t moan when it disappoints on the upside. It is generally accepted that equities will provide a more satisfactory longer term return if held for a few years. But what if we want more than “just” satisfactory, at least with some of our money? What is available?

You can go up the risk scale slightly by investing in smaller companies or overseas funds, but the real fun kicks in if you put your head above the single country or single sector parapet. If you are a believer in the China and India story, why not invest in funds that are specifically focussed upon these countries rather than the more common “emerging market” catch all? Take this a step further and aim your sights at surrounding countries such as Indonesia, Taiwan and Thailand. There are individual funds to cater for each of these, but let the recent coup in Thailand act as a warning of what can occur in these areas. Russia is another country which some investors prefer to invest in directly, rather than potentially diluting their returns within a more widespread Eastern European fund, but as with most “emerging” markets such as these, don’t expect to be able to draw your money out quickly if things take a turn for the worse.

Sector investing can be interesting. Biotechnology and healthcare are two sectors that always make great sense on paper, but it has been a number of years since dabbling in drug development has been anything other than a headache. A few shrewd judges have begun to take a stake in the technology sector once again, while oil and gold remain high on the list of recent successes, but which have each fallen back sharply from their earlier highs, with unpleasant consequences for those who bought in too late.

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Three areas have caught been in the spotlight during the latter part of 2006. Water is becoming a rarer and rarer commodity and whenever something becomes scarcer, the value of it tends to rise. Better still, if you can invest in a fund whose sole aim is to find companies that can help in the distribution, development and management of water around the world, you may be on to a long term winner.

Similarly, we should all be grateful to learn of the successful discovery of an alternative energy source to take the pressure off oil as our economic lifeblood, so investing in companies that are looking to do exactly this could be rewarding in more ways than one. Funds such as Pictet Water and Merrill Lynch New Energy should satisfy such investors.

Thirdly, TV, film and music are flourishing. If anything, the media sector is developing at ever more rapid a pace, particularly as that most potentially beneficial word in any investors’ vocabulary – deregulation – appears to be occurring globally within the sector.

As ever, it is important to maintain a balance within any investment portfolio, but sometimes it makes sense to invest in what the world wants and a bit of homework can turn up a fund that is far from mainstream, yet provides exactly what you are looking for.

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