How I’d invest £1,000 in the stock market for June

Jon Smith explains where he’d allocate £1,000 of his money in the stock market over the next month, despite recent jitters.

A graph made of neon tubes in a room

Image source: Getty Images

The stock market has been up and down like a yo-yo over the past month. During May, investors like myself had to contend with another high inflation shock, more bad news about high energy prices and the continuation of the war in Ukraine. However, good employment data (the lowest for several decades) and some upbeat Q1 earnings from FTSE 100 companies helped to counterbalance this. So as I head into June, here’s how I’d go about investing £1,000.

Talking strategy and buying

The first thing I’d do is actually break my £1,000 into four chunks of £250 and invest each week during June. If the volatility remains the same as May then I feel that splitting up my money will help me out. If one week the mood in the stock market is sour, I’ll be able to buy at cheaper levels than might be seen later in the month.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Another technical point I’d note for buying is that I’ll leave orders to automatically execute at predetermined prices. This again plays on the volatility element. When I’m happy with the list of stocks I want to buy for the particular week, I’ll place orders for that time period. Then if the share price hits that level, my system will automatically buy me the amount of shares I want. The advantage here is that I should be able to buy at a lower price than on offer currently. The disadvantage is that it might not hit that price during the week.

Outlining the stocks I want

For June, most of my money will go towards dividend shares in the stock market. I continue to be of the opinion that inflation here in the UK isn’t going to fall until at least the autumn. Therefore, I want to make use of high-dividend-yield stocks that can help me to offset the erosion of my cash balances. Obviously, income from dividend stocks isn’t a foolproof way to offset an ever changing inflation figure, but it does help.

Examples that I like at the moment are M&G, Rio Tinto and Persimmon, all with current yields in excess of 8%. In fact, if I buy shares in each company, my blended yield would be almost 10%. I’d look to do this not only for the yield, but also to diversify the stocks that I hold. That way, even if one of the companies decides to cut its dividend per share, I still have income coming in from elsewhere.

Aside from dividend payers, I think that June is a good time for me to buy clean energy stocks. I recently wrote about ITM Power and Greencoat Renewables and why I think they could perform well this summer and beyond.

Navigating the stock market successfully

I think that now is a good time to invest in the stock market, despite the uncertainty. To navigate the market successfully in the long term, I have to be invested during both the good and bad times. So even if the market falls in June, I can use this to my advantage with my £1,000 to buy quality stocks at a lower price.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Jon Smith and The Motley Fool UK have 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Preparing a budget during a pandemic
Investing Articles

2 high-potential FTSE 250 stocks to buy and hold for 5 years!

The FTSE 250 is a good place to search for the next big British stocks. So, here are two companies…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Could my Stocks and Shares ISA generate £30,000 a year?

Over 2m UK citizens make some use of a Stocks and Shares ISA every year. Our writer considers if it’s…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

4 dividend stocks that can help me fight inflation!

I'm looking at dividend stocks to help my portfolio grow and overcome the impact of high inflation. Here are the…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

2 bargain UK shares trading at less than book value

Book value is a great way to value a stock. These UK shares are trading at a price-to-book ratio of…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

A FTSE AIM stock I’d add to my Stocks & Shares ISA in July

Henry Adefope highlights a FTSE AIM stock he believes could generate significant upside for his portfolio if he buys this…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

I’m following Warren Buffett and buying cheap dividend shares to build my wealth

I think this cheap dividend stock exhibits similar qualities to the companies Warren Buffett has in his investment portfolio.

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

2 cheap FTSE 100 shares I’m buying during the dip!

Andrew Woods explains that low P/E ratios and profitable businesses attract him to these two FTSE 100 shares.

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 45% in a year, is now the time to buy Scottish Mortgage shares?

Jon Smith explains why Scottish Mortgage shares appear to him to be good value given their post-pandemic fall.

Read more »