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Dividends, defence and the metaverse. Here’s how I’m investing for 2022

Trader on video call from his home office

It’s usually quite easy to pin down what you want to achieve from investing. It might be capital growth, income or other ideas. But what can often be hard to pin down is how exactly to bring these goals to life. When I consider my investing aims for 2022, here are the three main ways that I’m going to try and achieve them.

Having some conservative options

First up is my aim for low-risk gains. With a portion of my portfolio, I want to invest to help protect me from potential risks and downsides. So how can I buy stocks that provide me with some defensive elements? Well I can look to certain sectors that typically have returns not linked to the state of the broader economy. 

That way, even if we do see a stock market crash, these companies should be able to perform without much of a knock. For example, I’d consider buying insurance companies such as Aviva. Or I’d look at a utility company like National Grid

By allocating some money towards a few companies like those mentioned above, I should be able to provide some protection for the rest of my portfolio that’s geared towards more aggressive aims.

Investing for growth in 2022

One of these more aggressive aims that I have is to try and increase my capital gains. For investing in 2022, I think one area that should do well is stocks related to the metaverse. I outlined in more detail about how I’d allocate £1,000 to metaverse stocks here

In short, I can take direct exposure to companies that are specifically involved in providing virtual platforms, such as Roblox. Or I can decide that I want to have more indirect exposure. For this, I could buy stocks that contribute to projects within the metaverse, but aren’t dependent on this business to survive. 

Making dividend income

Finally, for a portion of my portfolio I want to generate income. When investing, the importance of making passive income from dividends is clear to me. Inflation is above 5% at the moment, something that can erode the value of my money and dividends can help me here.

Of the three aims, I think this is the easiest one to put in action. I can easily compare dividend stocks via the dividend yield. This allows me to assess what level of income I’d be happy with, when comparing it to the risk of the individual stock and the rate of inflation.

Two options that I like at the moment are Tate & Lyle and Investec. These both offer above average yields, and should be able to weather an economic storm if it comes next year.

Companies aren’t guaranteed to pay out dividends, so when planning for 2022 I do need to make some allowances for this possibility. 

Overall, when considering how I should invest for 2022, I think that I can get growth, income and some protection from defensive stocks all within one portfolio.

The post Dividends, defence and the metaverse. Here’s how I’m investing for 2022 appeared first on The Motley Fool UK.

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Jon Smith and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.