If I had a spare £1,000, here’s where I’d invest in the stock market now

It makes sense to think that now is a good time to put money into the stock market. The performance of FTSE 100 the past few months have been very impressive.

But I think there’s a big difference between wanting to invest just because I don’t want to miss out, and knowing specifically which market areas I should invest in.

Share my money

With a theoretical £1,000, I would split it into four £250 chunks. I will allocate each section to a different sector. There, I’ll pick one or two stocks where I feel they fit my needs. I don’t want to share more money because it’s starting to get diluted.

The four sectors I will focus on are healthcare, renewable energy, finance, and technology.

Future growth potential

Healthcare is the first sector I’m interested in right now. Despite the negative impact of the pandemic, the demand for medicines and related products remains high. Last year, 19% of the UK population was aged 65 or over. This is expected to grow to 22% in the next 10 years (approximately 13 million people). An aging population means more demand for medicines and the development of new medical products.

I have to be careful in certain stocks that I choose. Some smaller companies can have all the success of just a few drugs, which can be risky if they don’t stop.

The second area is renewable energy. I think few of us would disagree that in the next decade, more energy use will come from renewable sources. Getting exposure to this sector has become easier. There are good investment trusts that own solar and wind infrastructure that should benefit directly from higher demand usage.

One risk with this area is that I know that more and more companies are looking to enter this space. This can reduce the profitability of existing companies as the business landscape becomes more competitive.

Riding the wave of interest rates and AI

Finance and banking stocks rarely go out of fashion. Of course, we could see another financial crisis like 2008 again. But over the next few years, I expect the sector to deliver strong returns. This is mainly because interest rates remain high, as central banks try and bring inflation back to their target. Here in the UK, the target was 2%, now it’s over 10%. It will take years for this to go down. In the meantime, banks will be able to enjoy strong net profits.

The concern is that if the UK economy really slows down this year, defaults on debt could lead to losses for banks.

Big tech is the last area where I park my £1,000. I want to focus specifically on artificial intelligence (AI) and robotics. This area is really starting to develop and I think it is the future. Hopefully, it won’t take over my job as a content writer, but if it does, I’m looking forward to making a profit from the AI ​​stock!