Where to invest $ 100,000 right now

Most of us have ringed in the New Year in a socially distant way – often, from our sofas. We toasted with friends – glasses of eggnog practically touching each other – via video calls. And we were happy to put 2020 behind us. But when planning where to invest in 2021, it’s important to keep that window open to last year. To be successful now and beyond, we must not forget everything that happened during the difficult year of 2020.

In 2020, investors faced an entirely new and unexpected situation: the coronavirus pandemic. Its effect on the stock market was temporary – the market collapsed, then recovered. But its effect on the way companies do business and the way consumers operate continues. And the crisis itself continues. So, understanding that, let’s talk about the best way to invest $ 100,000 right now. (And if you don’t have that amount, you can scale this plan down depending on your budget.)

The current crisis

First, I would invest $ 50,000 in a basket of businesses that will not be affected by the current health crisis. Despite the launch of a vaccination program, cases of COVID-19 are on the rise in the United States. Even if you are investing for the long term, this is important. Why? Because we don’t know how long the situation will last – and we don’t know the full effect it will have on the businesses that are suffering the most.

Taking this into account, I would invest $ 10,000 each in Abbott Laboratories (NYSE: ABT), Teladoc Health (NYSE: TDOC), Vertex Pharmaceuticals (NASDAQ: VRTX), Amazon (NASDAQ: AMZN), and Target (NYSE: TGT). The United States Food and Drug Administration (FDA) has granted emergency use authorization (EUA) for eight of Abbott’s coronavirus tests – including a new, quick and inexpensive home test. With President-elect Joe Biden’s support for testing, we should expect an increase in income there. Teladoc, leader in virtual medical visits, saw its quarterly turnover climb to triple digits last year. Most importantly, the trend continued even as doctors’ offices reopened and coronavirus cases declined.

Vertex specializes in the treatment of cystic fibrosis. In fact, the company predicts that it will continue to be the main player in this market at least until the late 2030s. Even during the coronavirus, Vertex was able to start new patients on its treatments and, during last quarter, increased its revenue forecast for products for the full year. Market leadership and strength in tough times give me confidence in Vertex for the long haul.

Reward investors

Amazon and Target both won last year for their ability to serve online shoppers with essentials like groceries and cleaning products as well as general merchandise. Amazon’s delivery system and Target’s same-day pickup and pickup sealed the deal. The shift from consumers to online shopping was not temporary, however. Analysts expect online retail sales to grow steadily in the coming years – with or without coronavirus. So these companies – and their actions – will continue to win.

Now let’s add some dividend paying stocks to the mix. Here, I’m looking for dividend aristocrats, or companies that have increased their dividends every year for at least 25 years. This track record indicates that they have the continued financial strength and willingness to reward investors – important factors when looking for regular income from a stock. Abbott and Target, which we’ve already picked, are both dividend aristocrats. I would also add Clorox (NYSE: CLX) and Mcdonalds (NYSE: MCD), with an investment of $ 10,000 each.

CLX Dividend data by YCharts

Clorox sales exploded in 2020, driven by demand for its cleaning products. This level of demand may not last beyond the health crisis. But I expect the revenue and profit to continue to increase gradually. Both settings have won most of the years over the past decade. As for McDonald’s, the company’s drive-thru strength should help as consumers continue to prioritize contactless experiences.

Two bets

Then I would make two bets – on the maker of a coronavirus treatment and on a car maker. While manufacturers of coronavirus vaccines soared last year, companies developing treatments have fallen behind. Regeneron (NASDAQ: REGN), for example, climbed 29%. (By comparison, vaccine developer Novavax (NASDAQ: NVAX) jumped more than 2,000%.) In November, the FDA granted the Regeneron antibody cocktail an EUA for the treatment of certain coronavirus patients. Regeneron could benefit because its cocktail will increase revenue in the short term, and in the long term, its seven marketed products could increase revenue and ultimately the share price. I would invest $ 10,000 in Regeneron.

You’re hereof (NASDAQ: TSLA) the share price continues to climb. But the same goes for the demand for its cars. Income has been increasing for about six years and the annual loss is gradually decreasing.

TSLA revenue (annual) by YCharts

And even in 2020 under pressure from the coronavirus outbreak, Tesla managed to deliver around 500,000 vehicles, on schedule. Once the health crisis is alleviated, demand and production will likely increase. So, I would now invest $ 10,000 in this stock.

And finally, we have $ 10,000 left. I would keep this money available to buy any opportunities that may arise in the months to come. As we know, the investment world is full of surprises – so it’s a good idea to have funds ready for action at all times.