January is always a great month to pause and take stock of our investing portfolios. It's relatively quiet on the markets, most of us have some time off, and symbolically, what better time for some reflection? That's certainly how I spent the first few days of 2026.
So now that we are pressing through January, here are some ideas for where to invest $7,000 (or whatever amount you can afford) into the stock market.
First up, I don't think investors can go wrong investing in an index fund. Index funds are passive investments that tend to work best for investors when a dollar-cost averaging strategy is used. This involves investing a certain amount at a regular interval (say $500 a month), and sticking to that schedule, regardless of what the market is doing.
The Vanguard Australian Shares Index ETF (ASX: VAS) is always a popular choice. This fund represents the largest 300 shares on the Australian share market. That's everything from Commonwealth Bank of Australia (ASX: CBA) to JB Hi-FI Ltd (ASX: JBH).
ASX shares have historically delivered meaningful returns and tend to pay out generous dividend income too.
An American index fund like the iShares S&P 500 ETF (ASX: IVV) is another option to consider if you'd prefer to have your money in companies like Netflix, Ford, Amazon or Pepsico. Warren Buffett himself has often recommended the S&P 500 for investors who want a hands-off investment, and likens the S&P 500 to investing in America itself.
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Another top stock to invest in this January
If you're after an individual company, though, you can't go wrong (at least in my view) with Washington H. Soul Pattinson and Co Ltd (ASX: SOL). Soul Patts, as it is more easily known, is an investment company with a huge portfolio of underlying assets. These assets include property, other ASX shares, venture capital, and private credit investments, amongst others. That means that, unlike most other individual ASX stocks, you get a high degree of inherent diversification from buying Soul Patts shares.
Soul Patts has been around for more than a century. Over the past two to three decades, it has delivered market-beating returns compared to the S&P/ASX 200 Index (ASX: XJO). That's in addition to the ASX's best dividend growth streak. This company has increased its annual dividend every single year since 1998.
This inherent diversification, combined with its past performance, makes Soul Patts, in my view, another top pick for investors in January 2026.
