Shares have produced excellent returns for investors in recent years. Last year, the MSCI World Index – which measures the performance of large- and mid-cap stocks in 23 developed countries – generated double-digit returns for the third year in a row.

Looking at stock market forecasts for 2022, the majority of analysts expect shares to keep rising this year. That said, the general consensus is that stock selection will be important if investors want to generate strong gains. Most experts do not expect the market, as a whole, to post the kind of gains it has produced in recent years.

Here, I’m going to highlight four shares I like for 2022. If I was looking to put new capital to work today, I’d be buying these four stocks for my portfolio.

‘Britain’s Warren Buffett’ just bought this stock

First up, Amazon (NASDAQ: AMZN), which is a major player in both e-commerce and cloud computing. It underperformed the other Big Tech stocks in 2021 and I think the share price weakness has created a buying opportunity. Sooner or later, I expect AMZN to play catch up.

There are a couple of reasons I’m bullish here. The first is that I expect Amazon to generate strong growth in its cloud computing division in the years ahead. The cloud market is forecast to grow at nearly 20% per year between now and 2028. This market growth should provide huge tailwinds for the company.

The second is that the valuation is now far more attractive than it used to be. Go back three or four years and Amazon had a price-to-earnings (P/E) ratio in the 200s. Today however, the forward-looking P/E ratio is about 65. Given Amazon’s dominance, I think that’s a reasonable valuation.

It’s worth noting that top portfolio manager Terry Smith (aka ‘Britain’s Warren Buffett’) just bought Amazon for Fundsmith Equity, so he clearly sees value in the stock.

But Amazon faced some challenges in 2021, including higher costs and supply chain issues. These issues could persist in the near term. However, eventually, I think they’re likely to go away as imbalances brought on by Covid-19 moderate. When they do, I expect Amazon’s share price to move higher.

A leader in digital payments 

Another stock I like for 2022 is PayPal (NASDAQ: PYPL). It’s one of the world’s leading ‘digital wallet’ companies. Currently, the company has over 400m users on its payments platform.

PayPal shares took a big hit in the final quarter of 2021. One reason for this was that 2022 revenue guidance was a little lower than the market had been expecting. I believe the share price weakness here has created a great buying opportunity. After the pullback, the P/E ratio is in the mid-30s, which seems very reasonable to me given the growth potential here as the world moves away from cash.

It looks set to be a major beneficiary of the continued growth of online shopping in the years ahead. Research shows that when merchants offer PayPal as a checkout option, consumers are around three times more likely to complete their sale. With e-commerce set to grow by around 10% per year over the next decade, PayPal looks set to get much bigger. 

Of course, PayPal does face plenty of competition. Not only from traditional rivals, such as the credit card companies, but it also faces competition from new payments technologies such as crypto. So there’s no guarantee it will do well.

With 400m+ users however, I think it’s well-positioned for the future.

Low valuation 

In the FTSE 100, I like Sage (LSE: SGE). It’s a leading provider of cloud-based accounting and payroll solutions that’s benefitting as businesses undergo digital transformation.

In recent years, Sage has been transitioning to a subscription-based business model and this now appears to be paying off. Recently, the company advised that for the year ending 30 September 2022, it expects recurring revenue growth in the region of 8-9%. It added that organic operating margin is expected to “trend upwards” in FY2022 and beyond.

“The Group enters FY22 in a strong position and with momentum,” said chair Andrew Duff.

I’m not convinced this shift to a software-as-a-service (Saas) business model is fully reflected in the valuation however. Currently, Sage shares have a P/E ratio in the low 30s. By contrast, US rival Intuit has a P/E ratio in the mid-50s. I think we could see the valuation gap here close in 2022. It’s worth noting that Sage has been buying back shares recently, so this should boost earnings per share.

One risk to consider here is competition from newer players, such as Xero. These kinds of companies could steal market share. But I think this risk is baked into the valuation.

Important technology 

Finally, I like Lam Research (NASDAQ: LRCX). It’s a maker of semiconductor manufacturing equipment. Over the last few decades, these have become a very important part of the global economy. Today, they essentially power all electronic products, including computers, smartphones, kitchen appliances, and electric vehicles.

The reason I’m bullish on Lam is that I expect to see countries all over the world build domestic semiconductor plants in the years ahead in an effort to minimise supply chain disruption. This should benefit Lam and other makers, such as ASML.

Lam strikes me as a high-quality company. Over the last five years, revenue has climbed from $5.9bn to $14.6bn. Meanwhile, over this period, return on capital employed (ROCE) has averaged 28%, which shows the company is very profitable. I don’t think the quality here is reflected in the valuation however. Currently, Lam trades at just 20 times expected FY2022 earnings. That seems very cheap to me.

A risk to be aware of is that semiconductor spending tends to be cyclical. So the company could face a downturn at some stage. I’m comfortable with this risk however. I don’t expect a downturn in the near term, simply because, with the world increasingly becoming more digital, demand for semiconductors is very high at the moment.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns ASML Holding, Amazon, Lam Research, PayPal Holdings, and Sage Group and has a position in Fundsmith Equity. The Motley Fool UK has recommended ASML Holding, Amazon, Lam Research, PayPal Holdings, and Sage 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.

I don’t want to put a dampener on 2022 just as it’s begun. But I feel that UK share investors like me need to take extra care if they want to make a decent near-term return, if any return at all.

The risks to the global economy and, by extension, to corporate profits, are significant. As Nigel Green, chief executive of investment firm deVere Group, said: “Headwinds — the factors that weigh down growth and positive returns -– are likely to outnumber the tailwinds in 2022 as the world continues to readjust to the post-pandemic era.”

The main risks facing shareholders in 2022

Green outlines the three main risks facing the economic recovery in 2022, dangers which I agree pose the biggest threat to shareholder returns. These are:

#1: A prolonged Covid-19 crisis

The Omicron variant is causing coronavirus cases to soar and uncertainty remains over its full economic impact. It has the potential to prompt more lockdown restrictions and to worsen the supply chain crunch.

#2: Rocketing inflation

Prices are rising at their fastest rate for many years in parts of the globe, putting consumer spending power under extreme pressure. Surging inflation is also encouraging central banks to hike interest rates which is, in turn, raising the cost of borrowing.

#3: China’s cooling economy

The world’s second-biggest economy is slowing rapidly and the real estate sector is in big trouble. A failure of a property giant like Evergrande could have major global consequences.

3 UK shares I’d buy for 2022

It’s fair to say that all UK shares will be affected by the issues above in some way or another in 2022. However, this doesn’t mean British stocks won’t be able to deliver decent near-term returns. With a little research it’s possible to dig out companies that could still thrive in the new year.

Take PZ Cussons, for example. The household goods manufacturer could suffer as inflationary pressure pushes up costs and hits consumer spending. But I’m confident the brand appeal of products like Imperial Leather soaps will keep volumes ticking over nicely and allow it to pass on these increased costs effectively. Furthermore, sales of its soaps and hygiene products may remain buoyant as long as the pandemic lasts.

I’m also confident the essential nature of power network operator National Grid’s services will help it deliver decent shareholder returns in 2022. That’s even though rising interest rates to limit runaway inflation would push up its debt costs.

Another share I’m thinking of buying for next year is Vistry Group. The coronavirus crisis could hit its home production targets if its building sites close down again. Homebuyer demand might also be hit if the Bank of England were to raise interest rates. But I still think it could perform strongly next year as Britain’s massive housing shortage keeps demand for new properties bubbling nicely.

Looking on the bright side

These are just three top UK shares I’d be happy to buy for my own portfolio for 2022. And there are a great many others I believe could deliver terrific returns this year. That’s why I plan to continue investing in British stocks.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended PZ Cussons. 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.

I don’t believe UK share investors like me need to spend colossal sums to build a winning stocks portfolio. Here are three rock-solid stocks I think could help me make a big stack of cash in the years ahead. Each of these bargain-basement beauties can be picked up for less than £3 a pop.

A FTSE 100 favourite

I think JD Sports Fashion (LSE: JD) could be one of the best bargains on the FTSE 100. At a recent price of 218p per share, the casual sportswear retailer trades on a forward price-to-earnings growth (PEG) ratio of 0.3. This sits well inside the widely-regarded bargain benchmark of 1 and below.

The athleisure specialist has a number of strings to its bow. It’s a market leader in a fashion segment that’s tipped to continue growing strongly (analysts at Grand View Research think it’ll be worth $549.4bn in 2028, up from $306.6bn, currently). The retailer is embarking on rapid global expansion to exploit this trend. Furthermore, its investment in its online operations has also been hugely impressive, raising hopes that it could thrive in the e-commerce age.

My main concern with JD Sports is the intense competition it faces, and particularly as heavyweight brands like Nike and Adidas are increasingly selling directly to customers.

Nuclear powered

Getting exposure to uranium (so to speak) could be another good idea as global power demand steadily increases. This is why I’d buy shares in Yellow Cake which trades the energy-making radioactive material. This UK share currently goes for 338p a share.

Investment in nuclear power is increasing as the search for low-carbon energy intensifies. The World Nuclear Association expects related energy capacity to leap to 630GW by 2035, up from 393GW in 2009. Yellow Cake’s in the box seat to exploit this theme, and I’d buy it despite the competition posed by renewable sources like wind and solar power to controversial nuclear.

A great renewable energy stock

Speaking of which, I think grabbing a slice of the ‘clean’ energy sector is an attractive option as the battle against global warming intensifies. Bluefield Solar Income Fund Limited  (LSE: BSIF) is a  cheap UK share I’m thinking of buying to ride this horse.

As its name suggests, this renewable energy stock (which trades at 123p) owns and operates predominantly solar farms. However, last year, its shareholders voted to allow the business to build its portfolio in other areas like wind and hydro. This could give the company more strength through diversification as investors wouldn’t have to worry as much when the sun fails to shine.

Naturally, Bluefield isn’t without risk, of course. Energy generation from renewable sources can be notoriously volatile, an issue that can have a big impact on revenues. The cost of maintaining solar panels can also take a big bite out of company profits. Still, it’s my opinion the rate at which green energy is growing makes Bluefield a top stock to buy right now.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Nike. 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.

I can’t imagine having to get by on £179.60 a week. But that’s the reality for millions of pensioners who only have the State Pension to rely on. That’s assuming they have made enough contributions during their working life to claim the full amount.

I don’t expect things to get any better by the time I come to retire. Britain’s population is rapidly ageing and the financial burden of this is having a direct impact on the State Pension. The economic consequences of Covid-19 is causing lawmakers to consider scaling back support for elderly citizens even further as well.

Fresh State Pension danger?

The age at which people can claim the State Pension rose to 66 last year. And, under current laws, extra increases are planned for the next couple of decades. The age at which people can claim will increase to 67 between 2026 and 2028, and again to 68 between 2044 and 2046.

However, a recently-launched government review could bring forward that target retirement age of 68 by several years. A recommendation on raising the age between 2037 and 2039 will be released in May 2023.

Why I buy UK shares

It may not happen, of course. But even if it doesn’t, my retirement date has already been pushed back. Yet I want to take control over when I’ll be able to hang up my proverbial work gloves. And I want to know that I’ll have the financial means to live comfortably when I do eventually retire.

This is why I’ve chosen to invest in UK shares to build a nest egg for retirement. According to the Pensions and Lifetime Savings Association, an individual would need £33,600 a year to live comfortably once they finish work. At current levels, the State Pension pays less that a third of that (£9,339.20, to be precise).

Retiring in comfort

That leaves a big shortfall to make up. But I’m confident that my investment strategy will enable me to enjoy a comfortable retirement. Long-term investors like me tend to receive an annual average return of 8%. Those that buy UK shares with a view to holding them for, say, a decade or more have a good chance of making a good stack of cash.

History shows us that I don’t have to spend a massive amount of cash to safeguard my retirement plans either. Let’s say I was to start investing £300 a month when I’m 30. By the time I reach 65, I could realistically expect to have built a cash pot of £642,770 with which to fund my post-work lifestyle.

This is why I’ll continue to buy UK shares in spite of the uncertain economic outlook for 2022. Sure, more stock market volatility could be in store this year. But over the long term, investing in stocks is a great way to try and make a decent pile of cash. And this is more important than ever as pressures on the State Pension only increase.

Royston Wild has no position in any of the shares mentioned. 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.

At the start of every year, I always spend some time reviewing my investment portfolio. I do this to ensure it’s still aligned with my financial goals and risk tolerance.

In this article, I’m going to provide readers with some insights into my portfolio. Here’s a look at my five largest stock holdings as we start 2022.

Alphabet

My largest is Alphabet, the owner of Google and YouTube. The reason this is my biggest holding is that I see considerable long-term growth potential here. Not only is growth likely to come from digital advertising and cloud computing, but it’s also likely to come from new technologies, such as artificial intelligence and autonomous vehicles.

Alphabet shares had a great run in 2021, rising more than 60%, so they don’t offer the value they did a year ago. Yet the forward-looking P/E ratio is still only about 26, which I think is quite reasonable. So I’m happy to keep this as my main holding.

Apple

My second largest holding is Apple, the maker of the iPhone. Apple is a massive company these days. Currently, its market-cap is around $3trn. But this doesn’t put me off. I think this company still has plenty of growth left in the tank.

One area I’m particularly excited about here is healthcare. Apple has made some great moves in this space in recent years with its watch, which offers users a whole lot of health measurements. Yet I think Apple is only scratching the surface here in terms of the potential.

Amazon

Coming in at third place in my portfolio is Amazon. It’s the largest e-commerce company in the world and also the largest player in cloud computing.

It’s the cloud division I’m most excited about here. This industry is set to grow by nearly 20% per year over the next decade and Amazon currently has a 40%+ market share. So I expect the company to get much bigger.

Diageo

My fourth largest holding is Diageo. It owns a number of top spirits brands including Smirnoff and Tanqueray. I like having DGE as part of my top five holdings because it’s a bit more ‘defensive’ than some of my other largest holdings. When the market is volatile, DGE tends to hold up pretty well, due to the nature of the business.

However, it still has plenty of growth potential. In the years ahead, Diageo looks set to benefit from the rise in wealth across the emerging markets.

Microsoft

Finally, my fifth largest holding is Microsoft, a technology company that’s active in a number of markets including cloud computing, video gaming, and remote work solutions.

Microsoft had a great run in 2021 so, like Alphabet, it doesn’t offer the value it did a year ago. However, I’m going to hold here as I believe the company is likely to get bigger in the years ahead as the world becomes more digitalised.

Risks

Of course, there’s no guarantee these stocks will do well in 2022. All face their own unique risks. Meanwhile, it’s worth noting that I have a lot of Big Tech exposure in my top five holdings. This is a risk as these stocks can, at times, be volatile.

I’m comfortable with the risks here however. Overall, I think these stocks offer an attractive risk/reward proposition for long-term investors like myself.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns Alphabet (C shares), Amazon, Apple, Diageo, and Microsoft. The Motley Fool UK has recommended Alphabet (A shares), Amazon, Apple, Diageo, and Microsoft. 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.

Investing in dividend stocks can be a great way to generate passive income. These stocks hand their investors regular cash payments for doing absolutely nothing.

However, it pays to be selective when picking stocks for passive income. That’s because companies can cut, cancel, or suspend their dividend payouts at any time. With that in mind, here are three dividend stocks I’d be comfortable buying for passive income in 2022.

Smith & Nephew

One dividend stock that strikes me as a top pick for passive income is Smith & Nephew (LSE: SN). It’s a leading healthcare company that specialises in joint replacement systems. SN has paid a dividend every year since 1937 and didn’t cut its payout during Covid, so it’s fair to say it has an excellent dividend track record. At present, the yield is about 2%.

I think Smith & Nephew has the potential to generate attractive total returns (dividends plus share price appreciation) in the years ahead. Throughout Covid-19, it has suffered because a lot of elective medical procedures have been postponed. As the world returns to normal, these procedures are likely to be resumed, which should boost revenues and the share price.

Of course, if Omicron results in a high level of hospitalisations, SN could struggle. In this scenario, the stock could underperform. I would expect the company to still pay a dividend however, given that it didn’t cut its payout in 2020.

Unilever

Another top stock for passive income, in my view, is Unilever (LSE: ULVR). It’s a consumer goods company that owns a wide range of brands, such as Dove, Domestos, and Ben & Jerry’s. This is another company with an excellent long-term dividend track record. Currently, the yield is about 3.6%.

The reason I see ULVR as a great pick for passive income is that the company is quite ‘defensive’ in nature. Consumers tend to buy its products no matter what the global economy is doing. This means Unilever is able to generate relatively stable revenues and earnings. This translates to consistent dividends, which is ideal from an income investing perspective.

There are risks to consider here, of course. One is inflation. Recently, Unilever has been facing higher costs and this has hit profits. Another is changing consumer tastes. Overall however, I think the risk/reward proposition is attractive.

Legal & General

Finally, for a high-yielder, I like Legal & General Group (LSE: LGEN). It’s a financial services company that specialises in insurance, investment management, and retirement solutions. At present, the yield here is around 6.4%, which I see as very attractive in today’s low-interest-rate environment.

Usually, I steer clear of high yielders when investing for passive income. That’s because, quite often, a high yield is an indication the market believes a dividend cut is coming. In this case however, I see considerable appeal in the stock. Over the last decade, the company has established an excellent dividend track record (it didn’t cut its payout during Covid). And, looking ahead, City analysts expect the payout to keep rising.

One thing to note here is that financial services stocks like LGEN can be a little volatile. In other words, the share price can move up and down. But I’m comfortable with this volatility. I think the key here is to ignore the share price movements and focus on the passive income the company is providing.

Edward Sheldon owns Legal & General Group, Smith & Nephew, and Unilever. The Motley Fool UK has recommended Smith & Nephew and Unilever. 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.

I currently have investments separated into various pots. Some of them are designed to provide a passive income that take up little of my time. If I was starting my passive income investments from scratch, this is what I’d do in 2022.

First, I’d decide on an investment amount and decide what I’d like to achieve from it. For instance, how much do I want and how often would I like income payments? Also, I’d invest a realistic amount that I won’t need for any other spending or saving.

It’s possible to create a passive income from stocks and shares starting with just £5 a day. It’s a relatively small figure that can add up over the years. For instance, £5 a day equates to £1,825 a year and £9,125 over five years. Minimum investments have changed over the years too. Today many brokers allow me to invest in fractional shares. This means I can buy shares starting with a relatively small sum. But of course, £5 would be just my starting point and the more I invest, the more income I’d hope to receive. 

Passive income from dividend shares

The income I achieve also very much depends on my goal. If I’m looking for passive income every year, I’d look at investing in dividend shares. Many companies pay a portion of their profits to shareholders in the form of dividends. There are a few points to consider when investing in dividend shares. Every company offers a different dividend yield. That’s the percentage of its share price that it pays out each year. A company’s dividend payment is typically paid from earnings. As such, dividend payments can fluctuate. As share prices also move up and down, dividend yields can frequently change.

Currently, the UK’s largest listed companies in the FTSE 100 offer a dividend yield of around 3.5%. But as that’s an average, there are several companies that offer over double that figure. I like to focus on finding dividend shares that offer over a 6% yield (which beats inflation). Currently, just 13% of the companies in the FTSE 100 yield over 6%, so I’d need to do some homework to find and research them.

But the dividend yield isn’t the only component I’d look at. I’d want to pick companies that have the best chance of offering me a passive income regularly. That means companies with reliable dividends. Preferably, I’d also like dividend payments to grow every year. I reckon the very best companies might also have a good track record of paying dividends over many years.

Top picks for 2022

Ticking all of these boxes narrows down my watchlist a lot. Some of the companies that fulfil these criteria include BHP Group, British American Tobacco, Phoenix Group, Rio Tinto and Aviva. On average, these five companies have a 7.8% dividend yield. That’s pretty good, in my opinion.

A word of warning, however. Dividends aren’t guaranteed, and companies can suspend or reduce dividends at any time. During the height of the pandemic panic in March 2020, many companies suspended dividend payments due to uncertainty surrounding their earnings. Occasionally, additional or special dividends are paid from excess cash flow. Again, these aren’t guaranteed and are reliant on company earnings.

Overall, I’d say that by careful selection, dividends from stocks and shares can provide a wonderful passive income. As such, I’m preparing my pots for 2022.

Harshil Patel has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco. 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.

I’m searching for the best cheap UK shares to buy in 2022. Here are three ‘nearly’ penny stocks I think could be top buys for the new year. Each costs less that 150p apiece.

A favourite foodie

Bakkavor Group’s (LSE: BAKK) a UK share that’s not for the fainthearted. The business is a giant in the food-to-go sector and, as a consequence, its revenues have been hammered by Covid-19 lockdowns. Similar restrictions have been avoided more recently but the threat of new ones remain as the pandemic rolls on.

I think this danger might be baked into Bakkavor’s share price though. At 133p, the foodie trades on a forward price-to-earnings growth (PEG) ratio of 0.8, below the benchmark of 1 that suggests a stock is undervalued.

I’d buy Bakkavor as City analysts think the food-to-go segment is set for explosive growth. Lumina Intelligence, for one, reckons the industry will be worth £22.6bn by 2024, up from £15.3bn today. One final reason why I’d load up on Bakkavor shares is that, at current prices, it sports a monster 5.4% dividend yield for 2022.

A top renewable energy stock

I believe buying renewable energy stocks could be a good idea for me as demand for ‘clean’ energy soars. This is where Foresight Solar Fund Limited comes in, a near-penny stock which holds stakes in solar farms in the UK, Spain and Australia. I also like this particular operator because it made its maiden foray into the potentially-explosive battery storage market earlier in 2021.

The unpredictable nature of solar power generation means that energy storage is critical. And with this type of renewable energy becoming increasingly popular, the market for batteries is tipped to grow rapidly. I’d buy Foresight even though operating solar farms is expensive and unexpected costs can hit profits hard. The stock trades at 101p today.

Another ‘nearly’ penny stock I’d buy

I’d also buy Scottish housebuilder Springfield Properties (LSE: SPR) because of a solid outlook for the UK’s homes market. Stamp Duty reductions earlier in 2021 helped inflate property prices, but the recent withdrawal is expected to reduce the rate of growth in 2022. But next year, estate agency Savills still expects average home values to rise by a healthy 3-5%.

Happily for Springfield Properties, it seems like (at least in my opinion) home prices should keep climbing too. Low interest rates and Help to Buy support for first-time buyers means demand should keep outstripping housing supply. I’d buy this cheap UK share even though inflated building product costs look set to remain in place next year.

Analysts at ING Bank recently said it won’t be until “at least until the summer of 2022” before prices of some construction materials, such as concrete, bricks and cement, will drop.

Besides, I think a forward PEG ratio — allied with a 4.4% dividend yield — for the financial year to May 2022 is too good to pass up on. Today, Springfield Properties trades at 147p per share.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Foresight Solar Fund Limited. 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.

As I write these words, just after Christmas, London’s Footsie stands at 7,432. Although I can’t predict quite where it will close the year on 31 December, I can’t imagine that the value will be very much different.

By comparison, the FTSE 100 closed 2020 at 6,603 — meaning that the market rose almost 13% in 2021.

That said, its closing value on 31 December 2020 was already much higher than its Covid-induced nadir of 4,944 on 23 March 2020, the day that lockdown was announced. By late-summer, the mega-bargains were becoming scarcer.

Wealth-constraining trackers

Even so, the index tracker crowd will have been happy with that near-13% gain during 2021. While the market today isn’t quite back to the Footsie’s 7,604 on 2 January 2020 — its peak value for the year — it isn’t far short.

And index trackers are deservedly popular, especially at the ultra-low costs typical of today’s offerings.

But if 2021 — and indeed, the post-lockdown recovery in general — has taught us anything, it is that trackers are a poor tool for profiting from company-specific or sector-specific share price recoveries. Which is what we’ve seen in 2021.

For as Covid-related fears and clampdowns have eased, a good number of companies have experienced surges in their share price far beyond the near-13% rise of the market as a whole.

2021’s winners

As I’ve said, I’m writing this ahead of New Year’s Eve — December 29th, to be exact. So the figures that I’m looking at compare share prices on 31 December 2020 with 23 December 2021.

Full-year outcomes might be slightly different, but the broad picture will be unchanged, I’m sure.

Looking at my own portfolio, for instance, I see that Greggs rose 82% over the period. Lloyds Banking Group, 31%. Marks & Spencer, 69%. Royal Dutch Shell, 31%. IMI, 50%. Aviva, 26%. Tritax Big Box REIT, 43%. Warehouse REIT, 47%. LXi REIT, 22%. And so on, and so on.

Outside my portfolio, other investors have also prospered. Investors in Croda International, for instance: up 51%. Diageo, up 40%. Ferguson (as the plumbing and building supplies firm Wolseley is called these days), up 47%. Glencore, up 61%. Meggitt, up 58%. And Tullow Oil, up 49%.

Not just a rebound

Now, for many investors, rises such as these will have simply represented a return — or in some cases, a partial return — to pre-pandemic share price levels.

But that isn’t the case for all investors. Because a goodly number will — like me — have topped-up existing holdings, or taken new positions, in shares in either late 2020 or early 2021.

So the odds are reasonable that a fair few of them will have done well, as their picks have prospered.

You didn’t have to be a genius, for instance, to see that resources stocks would do well as the global economic recovery picked up speed.

Surplus cash

And make no mistake: such calls were being made, and money was being invested, rather than spent elsewhere.

As I’ve written several times before, Bank of England figures show consumer credit figures falling off a cliff as the pandemic hit, with most months since comprising a net repayment of debt. The annual growth rate of credit card balances, for instance, is minus 5.5%, according to the latest Bank of England Money and Credit report to hand at the time of writing.

And it’s not difficult to see why: for those in work, money continued to roll in, but opportunities to spend it were lacking.

Here’s to wealth 

Not everyone was so fortunate, of course, but for those who were, then debt repayment, saving, and investing were obviously sensible choices. The first half of the 2021 saw particularly strong net fund inflows, as investors topped up ISAs, Self-Invested Personal Pensions (SIPPs), and brokerage holdings.

Were you among such investors? Let’s hope so.

And more to the point, let’s hope that you will be among the investors continuing to build their wealth during 2022.

Malcolm owns shares in Greggs, Lloyds Banking Group, Marks & Spencer, Royal Dutch Shell, IMI, Aviva, Tritax Big Box REIT, Warehouse REIT, and LXi REIT. The Motley Fool UK has recommended Croda International, Diageo, Lloyds Banking Group, Tritax Big Box REIT, and Warehouse REIT.