In 19 days, the curtain will close on 2021 – and when it does, it will likely be another outperforming year for the stock market.
Until December 8, the benchmark S&P 500 had gained a hair of more than 25% for the year. That’s more than double the average annual total return of around 11%, including dividends, for the index widely followed since the early 1980s.
However, a new year means new opportunities for investors to get rich. The key is to put your money to work in the foolproof trends for the year ahead.
If you have $ 1,000 on hand, which won’t be needed to cover bills or emergencies as they arise, the following five unstoppable trends would be perfect for investing in 2022.
Image source: Getty Images.
If my arm was crooked and I had to pick the safest investment trend for 2022, I would have to follow the growth in the cybersecurity space. Bots and hackers aren’t taking a day off just because the US economy or stock market is struggling, which has allowed cybersecurity solutions to evolve into a basic service for businesses of all sizes.
Cyber ââsecurity has taken on even more meaning in the wake of the 2019 coronavirus disease (COVID-19) pandemic. As businesses are forced to resort to remote work scenarios, many have turned to or strengthened their presence online and directly with consumers. This means that more responsibility for protecting corporate and customer data is placed on third-party cybersecurity actions.
The first name to consider when it comes to cybersecurity is CrowdStrike Holdings (NASDAQ: CRWD). CrowdStrike’s Falcon platform relies on artificial intelligence to become smarter over time and was built in the cloud. This makes Falcon more agile than on-premise solutions to recognize and respond to potential threats.
CrowdStrike might not offer the cheapest cybersecurity services, but Falcon’s efficiency seems well worth the extra cost – and its customers seem to agree. In less than five years, CrowdStrike’s subscriber base has grown from 450 to nearly 14,700, with 68% of its customers purchasing at least four cloud module subscriptions.
Image source: Getty Images.
While 2021 hasn’t dealt with work-at-home inventories very well, some trends that have come to the fore during the COVID-19 pandemic are here to stay. One of those unstoppable investment trends is telehealth.
The obvious concern with telemedicine is the expectation that growth could drop over the next few quarters as vaccination rates rise and patients return to doctor’s offices and hospitals. While it is true that growth rates could normalize after a huge spike in demand for virtual tours in 2020, the normalized growth of telehealth is still huge. Telehealth is expected to grow at a compound annual rate of 38.2% through 2025, according to market research firm Frost & Sullivan.
In addition, telemedicine is a positive element upstream and downstream of the healthcare chain. It is often much more convenient for patients and it allows doctors to monitor chronically ill patients more closely. The ability to more easily connect patients with GPs or specialists should lead to better outcomes, which means less money in the pockets of health insurers.
The first name to consider purchasing in this space is Teladoc Health (NYSE: TDOC). Teladoc expects a median of 14.6 million virtual visits in 2021, and the company is quickly approaching the 750,000 long-term care members registered with Livongo, the applied health signals company acquired in late 2020. Services of Livongo targeting a wide range of American adults and Teladoc delivering sustained sales growth of 74% in the six years leading up to the pandemic, it ticks all the boxes of a long-term winner.
Image source: Block.
Financial technology (fintech)
Another unstoppable trend to invest $ 1,000 in a 2021 carryover is fintech, better known as fintech. As the name suggests, FinTech companies are using technology to improve financial services solutions for consumers.
During the pandemic, banking customers were pressured to transact online or through a mobile device. But even before the pandemic, we were seeing a predominantly younger generation of consumers relying on mobile devices to pay for goods and services, transfer money, and trade stocks and cryptocurrencies.
Perhaps the most intriguing name in the fintech space is To block (NYSE: SQ), the company that was officially known as Square until last week. For over a decade, Block’s seller ecosystem has been its foundation. Between 2012 and 2021, the gross payment volume on its network increased from reported $ 6.5 billion to an estimated annual rate of $ 167 billion at the end of September.
However, it is the peer-to-peer digital payment platform Cash App that holds the most promise. Cash App’s Monthly Active User (MAU) count more than quintupled in three years, with Block acknowledging a gross profit of $ 55 per MAU in mid-2021, which compares to an acquisition cost per MAU of just $ 5.
Image source: Getty Images.
It might not be the fastest growing investing trend, but anything pet-related is a sure-fire place to invest $ 1,000 right now.
According to data from an American Pet Products Association (APPA) survey, the percentage of American households with pets has increased from 56% in 1988 to 70% in 2021-2022. This represents more than 90 million households with a furry, feathered, gilled or scaled pet. With people stranded in their homes during the pandemic, pet ownership rates have received a big boost.
Plus, it’s been over a quarter of a century since annual pet spending has declined year over year. Even making their way through the dot-com bubble, financial crisis and COVID-19 pandemic was not enough to stop pet owners from opening their wallets to their “family members.”
One of the many names to consider putting your money into is Petco health and wellness (NASDAQ: OUF). In addition to offering a wide assortment of pet food, treats, toys and accessories, Petco is opening a number of in-store veterinary clinics and leveraging multiple subscription channels to increase margins. This includes the pet insurance offering, which is an untapped treasure trove of opportunity in the United States.
Image source: Getty Images.
Finally, potentially look for the hottest investment trend in 2021 to carry over to 2022: the metaverse.
The metaverse describes the next iteration of the Internet, which will allow users to interact with 3D virtual environments. While the Metaverse is still in its infancy, the ways to potentially make money from virtual worlds seem to be getting worse week by week. It is possible to invest in the underlying technology and products that make these virtual worlds work. Money can also be earned by buying and renting virtual land, advertising in the metaverse, and of course making games in the virtual domain.
To be clear, the metaverse is far from mainstream. In fact, there aren’t even good estimates as to its size or how quickly we might see widespread adoption. But the investments in this space are huge, and it should not be ignored.
Unsurprisingly, the smartest company to own to capitalize on the growth of the Metaverse is Meta-platforms (NASDAQ: FB), the parent company of social media juggernaut Facebook. Social media advertising will undoubtedly remain Meta’s primary revenue driver for years to come. But as a leader in virtual and augmented reality, Meta and its deep pockets are well positioned to become a key player in the metaverse.
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Randi Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of the board of directors of The Motley Fool. Sean Williams owns Meta Platforms, Inc., Square and Teladoc Health. The Motley Fool owns and recommends CrowdStrike Holdings, Inc., Meta Platforms, Inc., Square and Teladoc Health. The Motley Fool has a disclosure policy.
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