2022 was the worst year for the S&P 500 and Nasdaq Composite since 2008. And while investors may have little dry powder left to buy stocks now, the dawn of a new year provides a refreshing opportunity to brainstorm.

If you're a net saver who regularly sets aside cash and invests new funds into the stock market, a prolonged bear market can provide an extended sale that allows you to scoop up shares of your favorite stocks and exchange-traded funds (ETFs). By holding through periods of volatility and dollar-cost averaging into the stock market (even during bear marks), you can accumulate more shares with the same amount of money. 

The best chance of outlasting a bear market is by investing in quality businesses at attractive valuations. Netflix (NFLX -0.04%), Brookfield Infrastructure Partners (BIP 3.87%), the SPDR S&P Biotech ETF (XBI 2.40%), Amazon.com (AMZN -0.11%), and the Vanguard S&P 500 ETF (VOO 1.17%) stand out as compelling buys now. And together, this basket offers a blend of growth, value, and income just in time for the new year.

A person stacking stones on a shoreline with a bright yellow sunset in the background.

Image source: Getty Images.

Netflix is a fantastic buy right now for both value and growth investors

Anders Bylund (Netflix): Excuse me if I sound like a broken record, but here we go again. Media-streaming veteran Netflix (NFLX -0.04%) is the strongest buy I see as the market rolls over from 2022 to 2023.

It doesn't even matter whether you see Netflix as a high-octane growth stock or a mature value investment. The stock is deeply undervalued either way.

This is nothing new, of course. Netflix has a long history of being misunderstood by investors and analysts alike. Remember when hedge fund manager Whitney Tilson sold Netflix stock short in 2010, arguing that the digital streaming idea would be a bust and the stock was overvalued? If you'd invested $1,000 in Netflix that day, it would be worth $11,000 now. Your returns would be even greater if you'd picked up Netflix shares on the cheap in the fall of 2011, as the Qwikster-branded separation between DVD mailers and online streaming services inspired a dramatic sell-off.

We have another situation like that on our hands nowadays. Netflix is switching its business focus from maximum subscriber growth to profitable revenue growth. The tools it chose for converting password-sharing viewers into new revenue streams may slow down Netflix's subscriber growth while adding more dollars to the top line.

Yet, market makers have not embraced Netflix's updated business plan. Despite a 50% rebound starting in July, Netflix shares are still trading nearly 60% below the highs of December 2021.

Let me snag a page from master investor Warren Buffett's playbook, too. In the Berkshire Hathaway owner's handbook, available on the company's investor relations website since 1996, the Oracle of Omaha explains how a company's rise or fall in book value should be followed by similar stock price moves:

"The percentage change in book value in any given year is likely to be reasonably close to that year's change in intrinsic value."

Netflix used to stick fairly close to this predictive effect, until the subscriber counts stopped skyrocketing:

NFLX Chart

NFLX data by YCharts

And there you have it. Netflix is deeply undervalued, almost regardless of what metric you measure it by. This stock is still a screaming buy.

This stock should earn you solid dividends in 2023

Neha Chamaria (Brookfield Infrastructure Partners): In Bloomberg's latest monthly survey, economists now see a 70% chance of the U.S. slipping into a recession in 2023. These can be scary times to be an investor in stocks, but one might do well betting on some recession-proof stocks right now that can also generate a steady stream of passive income during tough times. When I say that, the stock that comes to mind right away is Brookfield Infrastructure Partners, an incredible dividend growth stock that's just plunged to its 52-week low.

Units of the partnership were down 25% in 2022 as of this writing as fears of rising interest rates and a downturn gripped the markets. However, the markets have failed to recognize the strength of Brookfield Infrastructure's business, its recent growth moves, and a dividend that should rise even in a recession.

Brookfield Infrastructure announced record numbers in the third quarter, with its funds from operations (FFO) growing 24% year over year thanks to a combination of inflation-linked tariff hikes, organic growth, and acquisitions. The first factor is particularly relevant right now, given the high inflationary environment. Brookfield Infrastructure, though, doesn't have to worry as its contractual rates for services rise with inflation.

To top that, 90% of its cash flows come from fees earned from contracts or regulated assets like utilities, midstream energy, and telecom towers. That means Brookfield Infrastructure also doesn't have to fear an economic slowdown. Not many stocks can boast this.

The best part is that while Brookfield Infrastructure's FFO will most likely grow, or at least remain stable, in 2023, its dividend is almost assured to rise by at least 5% in the year. The company has a solid track record, having increased its dividend at a compound annual rate of 9% over the last 10 years. Now combine that with its yield of 4.6%, and you have a stock that could not only navigate a downturn but pay you for owning it in 2023.

Buy a basket of biotech stocks in one fell swoop

Keith Speights (SPDR S&P Biotech ETF): I'm going to cheat with my pick for January. Instead of recommending just one stock, I'm going to recommend over 150 biotech stocks. You don't have to buy each stock individually, though. Instead, you can invest in the SPDR S&P Biotech ETF. 

This exchange-traded fund is run by the pioneer of ETFs, State Street. As its name implies, the SPDR S&P Biotech ETF focuses on the biotech industry. The ETF attempts to track the S&P Biotechnology Select Industry Index. It currently owns shares of 152 biotech companies.

Biotech stocks have been in a bear market for quite a while. The SPDR S&P Biotech ETF began to sink in early 2021. It's now down more than 50% below its all-time high and fell more than 30% in 2022. However, I think the worst is over, and better days could lie ahead in 2023.

For example, the biggest holding in the ETF -- Madrigal Pharmaceuticals (MDGL -2.54%) -- should have a lot more room to run. In December, Madrigal announced great results from a late-stage clinical study evaluating experimental drug resmetirom in treating nonalcoholic steatohepatitis (NASH). NASH is a liver disease that presents a significant financial burden on the U.S. healthcare system. There currently are no approved drugs for the disease. Madrigal plans to file for U.S. accelerated approval of resmetirom in the first half of 2023.

But buying individual biotech stocks such as Madrigal can still be risky. The SPDR S&P Biotech ETF reduces this risk by enabling investors to buy a basket of biotech stocks in one fell swoop. Its expense ratio of 0.35% is a reasonable price to pay for the diversification that it provides.

I won't predict that this biotech ETF will soar in January. However, I do think that investing in the SPDR S&P Biotech ETF now will pay off handsomely over the next few years. There are too many innovations on the way for biotech stocks to remain beaten down.

Amazon (the company) is performing much better than Amazon (the stock)

Daniel Foelber (Amazon): The drawdown in Amazon stock is unlike anything the rest of big tech is experiencing. Not only is Amazon down 50% year to date. But it is also hovering around its pandemic-induced March 16, 2020, low of $81.30 (split-adjusted) and is within striking distance of a five-year low.

A lower price doesn't automatically make a stock worth buying. But the Amazon stock sell-off is truly jaw-dropping given how much better of a company Amazon is today than it was a few years ago.

The main reason for buying Amazon stock now is Amazon Web Services (AWS). AWS has exhibited roaring growth and is the cash cow that fuels the company's other ventures. In 2018, AWS generated $25.7 billion in net sales and $7.3 billion in operating income. In the first three quarters of 2022 alone, AWS generated $58.7 billion in net sales and a staggering $17.6 billion in operating income. The growth and profitability figures are hard to imagine in such a short period of time.

2018 is a significant year because it marked the last major drawdown in Amazon stock. I'll never forget Christmas Eve 2018 when the U.S.-China trade war panic resulted in a brutal December sell-off that sent Amazon stock briefly down to a pre-split level in the low $1,300s ($65.35 split-adjusted). By the first trading day of 2019, the stock was above a split-adjusted $73 a share. And it seemed like a life-changing moment to buy Amazon stock.

The fact that Amazon has round-tripped years of gains, underperformed the S&P 500 for the past five years, and is now close enough to that Christmas Eve 2018 level makes it too good of an opportunity to pass up. Especially given where AWS is today versus four years ago.

Amazon overexpanded its warehouses and delivery and logistics networks. And the expansion was painfully ill-timed given the macroeconomic climate. But Amazon is truly in a league of its own. And it's easy to see a path where it could be the largest U.S.-based company by market cap in five to 10 years.

A Warren Buffett index fund

Trevor Jennewine (Vanguard S&P 500 ETF): Warren Buffett offered the following advice in his 2015 letter to shareholders: "For 240 years it's been a terrible mistake to bet against America, and now is no time to start. America's golden goose of commerce and innovation will continue to lay more and larger eggs." That deep-rooted belief in American business explains why Buffett has frequently recommended an S&P 500 index fund, and why he owns shares of the Vanguard S&P 500 ETF through Berkshire Hathaway.

The Vanguard S&P 500 ETF mirrors the performance of the S&P 500, a stock market index that includes 500 large-cap American businesses. Its constituents span all 11 market sectors, and they represent a mix of value stocks and growth stocks. That diversity makes the S&P 500 a good benchmark for the broader U.S. economy.

To that end, the Vanguard ETF makes it possible for investors to buy a slice of the U.S. economy. It allows investors to spread their wealth across a diversified blend of blue chip American businesses, and that is a particularly compelling thesis for anyone who, like Buffett, believes that American innovation will continue to propel the U.S. economy to new heights in the future.

It is a good idea to buy shares of the Vanguard ETF on a regular basis, but right now is an especially good time to invest. Recession fears have tipped the S&P 500 into a bear market, and the index currently sits 21% off its high. That means investors can buy a slice of the U.S. economy at a discounted price, knowing that the S&P 500 has recovered from every past bear market.