How I’d invest £1,000 in top metaverse stocks in December

Jon Smiths talks about some specific top metaverse stocks and how he’d slot them into his existing stocks portfolio for the coming month.

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.

In recent months, the metaverse is an expression that has crept in to a lot more conversations. Be it from the Facebook rebranding to Meta or the rise of virtual world crypto coins, it’s a concept that’s becoming more accepted around the world. It basically refers to the idea of a virtual world, where an avatar (a reflection of me in this alternate world), can go and do just about anything. Here are some of the top metaverse stocks I’m looking at for December.

Making sure I spread my risk

Before I get to some specific stock ideas, it’s key to remember that if a £1,000 investment amount was my only exposure to the stock market, I wouldn’t put it all in top metaverse stocks. This is because the sector is still very young and unproven. Therefore, it would be very risky to go all-in.

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Were this an extra £1,000 that’s going to supplement my existing stock portfolio, then I’d feel comfortable putting it in this new area. As long as I have other lower-risk stocks that I can use to offset the high risk, then I’d look to split the £1,000 over four metaverse stocks. It would give me enough exposure to really benefit if one takes off, but would also spread my risk between a few options.

This spreading of risk is important because even within the metaverse, there’s a broad range of different companies to invest in. Some are involved more with the hosting of platforms, others with building elements within the universe. So getting a mix across the sector would be a smart move.

Top metaverse stocks to consider

One metaverse stock that I like at the moment is Roblox. It’s an online gaming platform that allows users to build their own games and components within the virtual space. From an IPO earlier this year at $45, the share price is flying, particularly over the past few weeks. It currently trades at $124, meaning that in less than one year I’d have almost netted a 3x return.

A stock that I’d consider buying is Argo Blockchain. The crypto currency mining company might seem an odd choice, but stay with me. Two of the fastest growing metaverses are Sandbox and Decentraland. These both have virtual coins. The coins are shooting higher in value, helping to boost sentiment in cryptocurrency in general. 

Argo Blockchain is one of the few stocks that’s related to crypto. When the crypto market rallies, so does the Argo Blockchain share price. So if these metaverse coins really take off, I’d expect the Argo Blockchain share price to rise too.

There’s a strong argument that can be made to include the rebranded Facebook. However, I’m cautious about buying its shares as I’m not convinced that it isn’t just a surface rebranding after all of the bad publicity that’s been coming out. 

The biggest risk with buying these top metaverse stocks is that this boom is just a flash in the pan. The world is moving quickly and so this might just be a fad that people will forget about in a year. If that’s the case, I might be left buying something pointless.

But on balance, I do think there’s value in metaverse stocks and am considering buying the above options.

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The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Jon Smith has no position in any share mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool UK has no position in any of the shares mentioned. 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.

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