Picking individual stocks can be challenging for investors. And given that the S&P 500 plunged 19% in 2022, it wouldn't be surprising if many investors just opted to stay out of the stock market entirely this year. But by doing so, you could end up missing the inevitable rally. It's inevitable because the economy is likely to rebound, and throughout history, after every market crash or bad year, there's always been a recovery.

The big question mark is when it happens. But rather than attempting to guess when and time the market, you're better off just taking a safer approach this year, and here's how you can do so.

Invest in exchange-traded funds

Exchange-traded funds (ETFs) provide investors with a great way to diversify. You don't have to have a position in every stock and you can select which types of sectors and industries you want to focus on.

One area that can be attractive is healthcare, where companies provide vital products and services that people can't afford to forgo, regardless of how the economy is performing. A couple of ETFs that focus on healthcare include the Health Care Select Sector SPDR Fund (XLV 0.03%) and the iShares U.S. Healthcare ETF (IYH -0.12%).

The Health Care Select Sector SPDR Fund aims to give investors exposure to the healthcare stocks within the S&P 500. There are more than 60 stocks within the fund, including such big names as UnitedHealth Group, Johnson & Johnson, and Pfizer, each of which account for more than 5% of the fund's holdings. Last year, this ETF declined less than 4%.

Investing in the iShares U.S. Healthcare ETF gives investors a focus on U.S.-based healthcare businesses involved with equipment and services, pharmaceuticals, and biotech. You'll get many of the same stocks as with the other fund but because the U.S. Healthcare ETF isn't limited to the S&P 500, it offers an even more diverse mix of stocks: There were 112 holdings in the ETF as of the end of 2022. Last year, the fund fell by less than 6%.

Spreading out your investment can reduce risk

Whether you plan to invest $10,000 or $100,000 into the stock market, a good strategy for minimizing risk is to average out your investment over course of the year. Valuations took a beating in 2022 but that doesn't mean investing the full amount of your planned investment in January will be the best move and that stocks can't go lower.

Instead, consider investing an equal amount each month. If you're investing $10,000 for the full year, then buying approximately $833 worth of stock each month would help you balance out your overall investment. The benefit of doing so is that if stocks continue falling, you're averaging down along the way.

And if you're buying ETFs, such as the ones mentioned above, you know that you're investing in strong businesses that are likely to rebound in the long run. If the market ends up recovering, then you're still in a good position because that means your earlier investments are profitable. And if it's the beginning stages of a bull run, that can also be an optimal time to be buying shares.

Buying stocks in 2023 can set you up for future gains

Given the bearishness in stocks last year, there are many beaten-down investments out there to choose from that can rally from here on out. If you're risk-averse and don't want to pick individual stocks, a strategy that involves loading up on ETFs and spreading out your investment over the course of a full year can be a profitable one.

The biggest risk for investors in 2023 may be being out of the markets entirely and missing out on a potential recovery.