Best stocks to buy in 2022

With the first half of the year nearly in the books, the best stocks to buy now aren’t what they were just six months ago. Investors on Wall Street have been confronted with new challenges that will test their patience and understanding. Most notably, the ramifications of stimulating the economy to offset the impact of the pandemic are starting to accumulate. Years of government payouts and supply chain issues have resulted in more inflation than the Fed is willing to accept.

According to the Bureau of Labor Statistics, the Consumer Price Index (an indicator that tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services) rose 7.0% in one year. Buying power has been diminished, and the Fed has already increased interest rates to combat inflation.

While the impending interest rate hikes aren’t sneaking up on anyone, they are altering the entire investing landscape. In particular, higher borrowing costs have led to an exodus out of high-growth tech companies with little to no revenue. Investors are more inclined to trade speculative earnings for value plays, as evidenced by the violent drop in the NASDAQ throughout most of 2022.

Established companies with legitimate earnings will be more likely to shelter investments from volatility, hence the rotation into value. However, broader market selloffs are starting to look overdone. Many promising companies in each of the major indices are now trading well below their 52-week highs. As a result of the disruption, long-term investors may be able to turn some of the casualties of the downturn into the best stocks to buy right now. While value plays will help hedge against volatility in a rising interest rate environment, the latest decline in some of today’s best companies may represent an opportunity to initiate a new position in high-growth equities.

The best stocks to buy now are directly correlated to the Fed’s decision to increase interest rates. Consequently, the higher-rate environment won’t treat every company similarly. Today’s economy will certainly serve as a catalyst for some companies and an obstacle for many more. Therefore, we have compiled a list of the companies that should benefit from today’s trends and outperform the broader market indices over the next five to 10 years.

Is Now A Good Time To Buy Stocks?

Investors in tune with the market are painfully aware of how volatile Wall Street has been throughout 2022. Dating back to the fourth quarter of last year, in fact, almost all of today’s major indices are down considerably. The S&P 500 index, which tracks the performance of 500 of the most prolific companies in the United States, has dropped somewhere in the neighborhood of 20% over the last six months. The Nasdaq Composite index, on the other hand, has dropped about 30% since reaching its all-time high last year.

In each case, inflation and the looming threat of a recession have tempered forward-looking guidance. The Nasdaq, in particular, has been hit hard because of the tech industry’s growth-oriented dependence on borrowing capital. As the cost of borrowing increases, unprofitable companies will have a harder time making money.

The impending inflationary economy will make it more difficult for businesses of all sizes to surpass previous earnings reports, and stock prices are reflecting as much. Shares of just about every equity on the market are down year to date, which begs the question: Is now a good time to buy stocks?

To be clear, there is no right or wrong answer to the question, only conclusions based on individual circumstances. Since it is impossible to predict the future and which way the market will head, investors must first determine their investment strategy and time horizon; then, and only then, will they be able to determine if now is a good time to buy stocks.

Investors with a short-term investment horizon will find today’s market much more difficult to navigate. If for nothing else, volatility looks like it’s here to stay until multiples are compressed, guidance is reigned in, inflation peaks, and the economy staves off a recession, all of which are easier said than done. Wall Street as a whole faces a lot of headwinds after government stimuli flooded the economy and resulted in some of the fastest-paced inflation the U.S. has ever seen. As a result, short-term trading is at the mercy of an incredibly volatile market.

While investors with short-term aspirations will find it difficult to trade in today’s market, those with long-term horizons may find today to be the best time to invest. At the very least, valuations have come in a lot; perhaps too much in some cases. The market tends to overcorrect, both to the upside and downside. As a result, the latest decline in today’s indices may represent a great buying opportunity for long-term investors.

If history has taught us anything, bear markets like the one we are currently in represent a great time to invest for those with long-term goals. With a little due diligence, a lot of patience and the right investments, investing now could help maximize future returns. Despite all of the red in investors’ portfolios, there’s a good argument to be made that the bottom is almost in. With each passing day, it appears more and more likely that today’s market has priced in all of the headwinds facing the market: inflation, geopolitical tensions in Europe, China’s lockdown, and a possible recession.

There’s no doubt about it; the bear market was warranted, but things seem to have gone too far in many cases. With that in mind, is now a good time to buy stocks? If investors are willing to hold a diversified portfolio of quality stocks for no fewer than five to 10 years, the answer is most likely yes. Some of the market’s best equities have been thrown out with the bathwater and warrant an investment.

However, it is worth noting that it’s impossible to time the bottom. Stocks can still decline from here, so investors will need to be able to endure some volatility. In the end, history has taught us that the market usually goes down faster than it goes up, but it often goes up more than it goes down; if investors keep that in mind, now looks like a great time to invest.

Best Stock To Buy This Year (2022)

It needs to be made abundantly clear: There is no such thing as “the best stock to invest in.” Stocks for beginners and veterans will vary based on individual needs. Even today’s best stocks to invest in aren’t guaranteed to play out as many predict. Market volatility has a way of humbling even the top 10 stocks to buy right now.

Nonetheless, now is an interesting time for the stock market. Quality companies have been undervalued while unprofitable, new entrants to Wall Street are extremely overvalued; there’s no making sense of a lot of what’s going on. That said, some equities have managed to navigate the market better than the rest of their counterparts.

Again, there’s no such thing as a perfect stock. However, these are the top 10 best stocks to buy now:

• Apple Inc. (NASDAQ: AAPL)
• Redfin Corporation (NASDAQ: RDFN)
• Palo Alto Networks, Inc. (NASDAQ: PANW)
• Shopify Inc. (NYSE: SHOP)
• PayPal Holdings, Inc. (NASDAQ: PYPL)
• Netflix, Inc. (NASDAQ: NFLX)
• The Walt Disney Company (NYSE: DIS)

Summary

Determining the top 10 best stocks to buy now isn’t as simple as reading an article and starting a position in a new company five minutes later. In reality, investors must first understand what they want out of their investment portfolio before they even consider investing a dollar in a single stock. Once intentions are disclosed, investors must then take a look at the overall market and determine which stocks will thrive alongside its current trends. The best equities aren’t in their current position simply because of each company’s performance, but rather because of how well they operate in a specific economic environment. The unique combination of great companies and complimentary macroeconomic conditions will create unparalleled opportunities for patient investors.

When all is said and done, there is no way of knowing the best stocks to buy unless you set a goal. How long is the investing window? Do you prefer passive investments or active investments? What is your risk tolerance? All of these questions, and many more just like them, must be answered before anyone can determine the best stocks to buy.