Where to Invest $1,000 in 2022
It's the start of a new year, so you're probably looking at ways to improve your financial situation. Investing in the stock market is a wonderful tool for doing just that. While it may seem complicated at first, with a little guidance, patience, and consistency, you can become a better investor.
That said, first make sure you have an emergency fund in place and that you have paid off any high-interest debt. After these important steps are taken care of, if you have some money that you're ready to invest , h ere are two worthwhile places to consider investing a total of $1,000 right now.
1. Home Depot
Home Depot (NYSE: HD) was a surprise winner during the pandemic. When they were stuck inside, people had limited options to spend their extra cash, and renovations easily became a top priority. That momentum carried through 2021 as the stock soared 56% for the year.
With trailing 12-month sales of $147.7 billion, Home Depot's sheer size is not difficult to miss. Consider that 90% of the U.S. population lives within 10 miles of a Home Depot location, so this proximity has helped defend the company from the likes of e-commerce juggernaut Amazon .
Home Depot's DIY and professional customers need products in a timely manner, so it's no wonder that in the most recent quarter (ended Oct. 31), 55% of online orders were fulfilled through a store.
Thanks to a supply shortage, the robust housing market is set to continue its strength in 2022. And Home Depot benefits from the pandemic causing Americans to reconsider their living situations, opting to move to suburban locations with extra room. Demand for homes supports housing prices. And when housing prices rise, people view renovation projects as investments in their homes.
This housing shortage "probably isn't going to get solved any time soon," CEO Craig Menear highlighted on the company's fiscal 2021 Q3 earnings call. "At the rate that we're building homes, even though it's an accelerated rate from where it's been, that backlog is going to be there for quite some time."
This situation clearly bodes well for the company. Home Depot is set to continue its success in 2022 and beyond. Buying shares today, which trade at a price-to-earnings ratio of just 24 (lower than the S&P 500 's 29), could be a very smart financial decision.
With its steady revenue and profit growth, massive scale, and importance in the U.S. economy, Home Depot appears incredibly safe -- especially when compared to my next recommendation: Bitcoin (CRYPTO: BTC) . I'm definitely pitching two investments on opposite ends of the spectrum here, but I think the world's top cryptocurrency makes for a solid addition to a well-diversified portfolio.
No doubt, Bitcoin is extraordinarily volatile. Price movements of 5% in one day aren't uncommon. However, over the past five years, it has had a remarkable return. A $100 investment in Bitcoin at that time would be worth a jaw-dropping $4,700 today. There is definitely uncertainty regarding the ongoing acceptance of cryptocurrencies with government regulation as the primary argument against the nascent asset class's success. But I believe that Bitcoin still has many years of outstanding returns ahead.
Enthusiasts view Bitcoin as a digital version of gold. Using this perspective, if Bitcoin simply becomes a new way to store value, there's a ton of upside to its current price of roughly $38,000. A few corporations are already starting to allocate a portion of their balance sheets to Bitcoin. And according to Cathie Wood , if institutional investors earmark just 5% of their portfolios to Bitcoin, it could be worth over $500,000 per coin. This scenario doesn't even take into account the potential for real-world use cases, such as merchant acceptance and remittances.
As of Jan. 21, Bitcoin is off over 40% from its recent high in early November 2021. And it now has a market value of around $750 billion. History has already shown us that Bitcoin always bounces back -- at least, so far -- from these price drops. Therefore, I think now is a great time to invest in this cryptocurrency.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Neil Patel owns Bitcoin. The Motley Fool owns and recommends Amazon, Bitcoin, and Home Depot. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy .