The Motley Fool

How I’d invest £1,000 in 3 FTSE 100 stocks

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

macro shot of computer monitor with FTSE 100 stock market data in trading application
Image source: Getty Images

The FTSE 100 index, which includes the UK’s top 100 publicly listed companies by market capitalisation, continues to inch up. On a day-to-day basis, the index changes may not appear significant at all. But when I look back, it has come a long way. From October 2020 to now, the index is up 21%. It has made steady gains every single month except one. 

I think this is an ideal time to buy stocks. If stock markets were rising too fast, then I would risk buying too late, when there was not much upside left.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Growth or income?

When deciding how to invest, I like to take a top-down approach. This means I like to divide my investment into both growth and income stocks. The ratio is dependent on where we are in the economic cycle. Right now, we are due for a cyclical upturn. This means that companies should show improved performance. 

At this point, I favour growth stocks. However, it is also essential to bear in mind that dividend payouts rise as companies’ demand increases. So if I buy stocks now that I think can increase their dividends later, my dividend yield can be quite high. There may be some wait, but for good reason.

So, with £1,000 to invest, I would put around £700 in growth stocks and £300 in income stocks. Of the £700 meant for growth investments, I would buy two stocks. Ideally, it is great to buy FTSE 100 stocks that have dipped, but are otherwise fundamentally sound. 

3 stocks I’d invest in

One of them is the food delivery provider Just Eat Takeaway. Briefly, it is a mammoth company now, after completing its takeover of US-based Grubhub. It is loss-making, but I reckon that is because it is fast growing. I have written about it in some detail in another article today. 

So I would rather focus on the other growth stock that I like, Ocado. Ocado was 2020’s star stock. As a grocery delivery provider, it saw a huge surge in demand last year as we were housebound. But its fortunes have dipped this year. In fact, today its share price is almost 4% below what it was a year ago.

To some extent, this has to do with a slowing down in its sales growth this year as life goes back to normal. But it also has to do with rotation out of stocks that were popular last year.

I think the case for food delivery providers stays strong. Consumers are expected to move to online shopping in increasing numbers, and Ocado is well placed to meet this demand. 

The income stock I like is Royal Dutch Shell, whose yield was at one time at a huge 10.7%, pre-pandemic. It is presently at 3.3%. I get that oil companies’ long-term future faces a huge question mark as we move away from fossil fuels. But for the foreseeable future, it will do well as the economy expands. And with that, it is likely that its dividend will rise too, I reckon. 

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Manika Premsingh owns shares of Ocado Group and Royal Dutch Shell B. The Motley Fool UK has recommended Just Eat N.V. and Ocado Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.