In 19 days, the curtain will close on 2021 -- and when it does, it'll likely go down as another outperforming year for the stock market.
Through Dec. 8, the benchmark S&P 500 had gained a hair over 25% for the year. That's more than double the roughly 11% annual average total return, including dividends, for the widely followed index since the beginning of 1980.
However, a new year means new opportunities for investors to get rich. The key is to put your money to work in surefire trends for the upcoming year.
If you have $1,000 at the ready, which won't be needed to cover bills or emergencies as they arise, the following five unstoppable trends would be perfect to invest in for 2022.
If my arm were twisted and I had to choose the most surefire investment trend for 2022, I'd have to go with growth in the cybersecurity space. Robots and hackers don't take a day off just because the U.S. economy or stock market are struggling, which has allowed cybersecurity solutions to evolve into a basic need service for businesses of all sizes.
Cybersecurity has taken on even greater meaning in the wake of the coronavirus disease 2019 (COVID-19) pandemic. With businesses forced into remote-work scenarios, many have turned to or beefed up their online and direct-to-consumer presence. This means even more responsibility for enterprise and client data protection is being thrust on third-party cybersecurity stocks.
The premier name to consider in cybersecurity is CrowdStrike Holdings (CRWD 1.64%). CrowdStrike's Falcon platform relies on artificial intelligence to grow smarter over time and was built in the cloud. This makes Falcon nimbler than on-premises solutions at recognizing and responding to potential threats.
CrowdStrike may not offer the cheapest cybersecurity services, but Falcon's effectiveness appears well worth the extra cost -- and its clients seem to agree. In less than five years, CrowdStrike's subscriber count has grown from 450 to almost 14,700, with 68% of its clients purchasing four or more cloud-module subscriptions.
Although 2021 hasn't treated work-from-home stocks all that well, some trends that vaulted to the forefront during the COVID-19 pandemic are here to stay. One such unstoppable investing trend is telehealth.
The obvious concern with telemedicine is the expectation that growth could drop off in the coming quarters as vaccination rates pick up and patients return to doctor's offices and hospitals. While it is true that growth rates could normalize following a huge spike in virtual-visit demand in 2020, normalized growth for telehealth is still huge. According to market research company Frost & Sullivan, telehealth is expected to grow by a compound annual rate of 38.2% through 2025.
What's more, telemedicine is a positive up and down the healthcare treatment chain. It's often far more convenient for patients, and it allows physicians to keep closer tabs on the chronically ill. The ability to more easily connect patients with general practitioners or specialists should lead to improved outcomes, which means less money out of the pockets of health insurers.
The top name to consider buying in this space is Teladoc Health (TDOC -2.40%). Teladoc expects a median of 14.6 million virtual visits in 2021, and the company is rapidly approaching 750,000 chronic care members enrolled with Livongo, the applied health signals company acquired in late 2020. With Livongo's services targeting a large swath of U.S. adults, and Teladoc delivering sustainable sales growth of 74% in the six years leading up to the pandemic, it checks all the boxes of a long-term winner.
Financial technology (fintech)
Another unstoppable trend to invest $1,000 in that's a carryover from 2021 is financial technology, which is better known as fintech. As the name describes, fintech companies utilize technology to improve financial service solutions for consumers.
During the pandemic, banking customers were nudged in the direction of completing transaction online or via mobile device. But even prior to the pandemic, we were witnessing a predominantly younger generation of consumers lean on mobile devices to pay for goods and services, transfer money, and trade stocks and cryptocurrencies.
Arguably the most intriguing name in the fintech space is Block (SQ 3.01%), the company that was officially known as Square until this past week. For more than a decade, Block's seller ecosystem has been its foundation. Between 2012 and 2021, gross payment volume on its network grew from a reported $6.5 billion to an annual run-rate estimated $167 billion, as of the end of September.
However, it's peer-to-peer digital payments platform Cash App that holds the most promise. Cash App's monthly active user (MAU) count more than quintupled in three years, with Block recognizing a $55 gross profit per MAU at the midpoint of 2021, which compares to an acquisition cost per MAU of only $5.
It may not be the fastest-growing investment trend, but anything having to do with companion animals is a surefire place to put $1,000 to work right now.
According to survey data from the American Pet Products Association (APPA), the percentage of U.S. households that owns a pet has rocketed higher from 56% in 1988 to 70% in 2021-2022. That's over 90 million households with a furry, feathered, gilled, or scaled pet. With people stuck in their homes during the pandemic, pet ownership rates received a healthy boost.
What's more, it's been more than a quarter of a century since annual spending on companion animals declined on a year-over-year basis. Even navigating our way through the dot-com bubble, the financial crisis, and the COVID-19 pandemic hasn't been enough to stop pet owners from opening up their wallets for their "family members."
One of many names to consider putting your money to work in is Petco Health and Wellness (WOOF -1.12%). Aside from offering a wide assortment of food, treats, toys, and accessories for pets, Petco is opening a number of in-store veterinary clinics and is leaning on multiple subscription channels to drive its margins higher. This includes offering pet insurance, which is an untapped treasure trove of opportunity in the U.S.
Lastly, look for potentially the hottest investing trend in 2021 to carryover to 2022: the metaverse.
The metaverse describes the next iteration of the internet, which will allow users to interact with 3D virtual environments. Though the metaverse remains in its infancy, the ways to potentially make money from virtual worlds seem to be compounding by the week. There's the ability to invest in the underlying technology and products that make these virtual worlds tick. Money can also be made by purchasing virtual land and renting it out, advertising in the metaverse, and, of course, creating games within the virtual realm.
To be clear, the metaverse is a long way from being mainstream. In fact, there aren't even any good estimates as to how big it could be or how quickly we could see widespread adoption. But the investments in this space are huge, and that shouldn't be ignored.
Perhaps unsurprisingly, the smartest company to own to take advantage of growth in the metaverse is Meta Platforms (META 1.21%), the parent company of social media juggernaut Facebook. Advertising on social media will undoubtedly remain Meta's core revenue driver for years to come. But as a leader in virtual and augmented reality, Meta and its deep pockets are in good position to become a key player in the metaverse.