If you have $1,000 to invest today, you may be hesitating. That's because certain signals about what's ahead are conflicting. The Federal Reserve predicted a mild recession later this year. But some experts say the economy has been resilient -- and a recession may not be in the cards. Meanwhile, the market has rallied since the start of the year, led by many growth stocks.
In such a situation, you might be tempted to just wait on the sidelines for more certainty. But if you did that, you could miss out on some great investing opportunities.
Tough situation? Not necessarily. Here's some good news for you: Investing right now doesn't have to be high risk, especially if you're holding on for the long term. And that's always the best way to invest. Let's check out where to place your $1,000 right now.
Your comfort level with risk
First, it's important to consider your comfort level with risk. That will determine how much you should put into companies that could deliver big over time -- but offer some uncertainty today. These are players that have been hit hard by inflation or other challenges and today are in a recovery phase. Another example: young companies that have recently reached profitability or are on the way.
If you're comfortable with risk, you might consider putting a big percentage of your money -- such as 60% or more -- into these sorts of stocks. However, if you're more of a cautious investor, you probably should put at least 60% of your money into safer assets.
Now let's get to the most exciting part: What should you buy with that $1,000 today? We'll start with stocks that carry a bit of risk.
Amazon (AMZN 3.43%) struggled last year as rising inflation pushed costs higher. But the company is on the path to recovery -- that showed in the latest earnings report. Even though the stock has rebounded more than 50% so far this year, it still makes an excellent long-term play. Amazon is trading at 2.5 times sales, lower than its average level over the past five years.
AMZN PS Ratio data by YCharts
And that ratio looks reasonable. Here's why. Amazon leads in two high-growth industries: e-commerce and cloud computing. It should benefit over time, especially once the economy recovers.
The company's cloud computing business -- Amazon Web Services (AWS) -- is investing in a key growth area, too: artificial intelligence (AI). Its Amazon Bedrock service makes it easy for AWS clients to build generative AI applications. All of this means now is a great time to invest in Amazon and hold on for the long term.
A potential buy
Another potential buy is Chewy (CHWY 2.99%). The online seller of pet supplies reached profitability last year -- and earnings are going strong. Chewy even plans to expand into Canada later this year.
The company is doing this in a smart and efficient manner. Chewy has built its platform out so that this expansion doesn't require a big initial investment -- and the company expects rewards to match those of the U.S. market.
Chewy stands out thanks to its broad services, from selling pet supplies to offering online vet visits and pet health insurance. That's helped the company grow active customers over time. Chewy's forward price-to-earnings ratio isn't shocking for a growth company, and it's come down quite a bit from a few months ago. Even as revenue is on the rise. So Chewy represents another promising long-term story.
CHWY PE Ratio (Forward) data by YCharts
Opportunities for cautious investors
Now let's get to examples of what to favor if you're a cautious investor. You could choose to put some of your cash into a money market fund. These funds invest in securities such as municipal bonds and U.S. Treasury bonds. The idea of money market funds is to invest in short-term, low-risk securities. So, it's a great idea to give them a try during times of uncertainty.
Even if you're a cautious investor, though, you still can find great opportunities among stocks. Opt for those committed to dividend increases and/or companies that offer some security when it comes to earnings growth -- such as healthcare companies.
You can get all of this if you buy shares of Johnson & Johnson (JNJ -0.46%). The company is a Dividend King, meaning it's raised its dividend for at least 50 years. And since people generally need their medicines and medical procedures regardless of the economic environment, the healthcare giant has grown earnings over time.
Beyond healthcare, another top dividend player and steady earnings bet -- thanks to its brand strength -- is Coca-Cola (KO).
So, yes, right now certain elements of uncertainty remain. We don't yet know if a recession will happen in 2023. But, when you invest for the long term, it doesn't really matter. You will experience periods of economic weakness and economic strength. However, if you invest your $1,000 wisely today, you could benefit over the long haul.
