There was no way for investors in 2021 to expect what was coming next. After a year filled with crypto schemes, meme stock rallies and multi-trillion dollar companies, the start of 2022 looked a lot more subdued (and potentially rocky going forward) thanks to uncertainty and instability around the world.
Stocks fell off a cliff in January 2022
January 2022 was the worst month for stocks since March 2020 at the start of the COVID-19 pandemic. As a rotation from growth to value stocks began, Wall Street started to get a bit more nervous at the Fed’s hinting of upcoming rate hikes and elevated inflation numbers.
On the flip side, this environment has been a boon for commodities stocks. Unfortunately, this benefit has not panned out for tech, with investors running away from some of the largest and most traditionally reliable stocks on the market. With all this in mind, here’s a look at 5 of the best stock picks you can choose in 2022 - as well as how each one has fared so far.
Alphabet Inc.
As expected for one of the world’s most valuable companies, Google continues to print money thanks to its all-encompassing presence. That said, it’s one of the most reasonably priced trillion-dollar names you can pick. It’s currently trading for the same price-earnings ratio as the S&P 500 on the whole. It’s also slightly discounted compared to the colossus that is Apple Inc.
Medifast Inc.
Medifast was a favorite last year for its compelling valuation and track record of reliable growth. Although it has suffered a bit of a slump at the start of this year, it’s rebounded and remains an affordable pick with high return on investment. It pays a 3% dividend and boasts a clean balance sheet with plenty of room for growth.
EOG Resources Inc.
With inflation on the rise and instability in Eastern Europe, spikes in oil prices are sending the global economy into a tailspin. That said, it’s entirely possible to make the most of this crisis with smart investing. EOG Resources, a U.S. oil and natural gas producer, will likely be increasing production to pick up the slack left by the Biden Administration’s ban on Russian oil imports. So far, we are already seeing a huge boost to oil stocks, and should the crisis deepen, we can only expect it to grow even more.
Microsoft Corp.
Microsoft is yet another tech stock that is safer than you might expect. This is because of how broadly the company has spread itself across multiple venues like productivity suites (Office), operating systems (Windows), hardware (Surface), and even gaming (XBox). Microsoft also recently acquired Activision Blizzard Inc, which is one of the most profitable companies in the entire gaming industry. If this acquisition is finalized, it would give Microsoft a huge boost over its rival Sony in the years ahead.
Meta Platforms Inc.
Meta may look like an unlikely pick due to its lackluster performance in recent months, but therein lies its secret to success. Meta (formerly Facebook) is betting big on Virtual Reality - and those with the vision to look ahead are doing the same. With luxuries like travel, gaming, and conspicuous consumption becoming more out of reach for average Americans, Meta is promising its VR “Metaverse” will be the go-to destination for simulations of the best that life has to offer. In the not so distant future, people may depend on VR for socialization and entertainment more than airline companies and travel agents. Hedge your bets accordingly.
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