Adnan Rafique M.D.
It's no secret that the stock market is very volatile and unpredictable. It makes the majority of rookie investors very nervous. We have never had so many new young investors in the stock market as we have seen in the last two years. Most of these investors were in absolute euphoria during 2021, but 2022 has not been easy for this group who seek instant gratification. Apart from Crypto, most of their lesser-known stocks have pulled back hard from 2021 highs.
I always teach newcomers in the market to decide what they want to achieve and what is their time horizon. If you want to make quick bucks and trade every day, you are a trader Not an investor. To be an investor, you need patience and discipline. There is nothing wrong with being a trader, I have several friends who trade daily or weekly, some of them do options and they do extremely well because they have a proven strategy that works for them. Whatever you decide to do, you must have a clear goal and target. Learn about companies and know how to read a basic financial statement of the company you are thinking about investing in. It is like buying a business, don’t buy crap and cheap companies.
For successful investors, the best stocks are not just those which grow really fast in a short period of time but also have stable earnings amidst a rapidly changing market. These stocks generally outperform others with their solid fundamentals and future demand for their innovative products and services. Hence provide sustainable returns for decades to come.
This list compiles the best stocks and sectors to invest in 2022.
1- Meta( Facebook): Despite all the commotions and noises, Facebook is one of the most innovative companies in the world with a great balance sheet and outlook. The company is sitting on a pile of cash, and in the next few years, META will allocate most of its capital in R&D to capture metaverse technology. With a current valuation, this company is not too expensive to own for a long-term growth.
2- Snap and PINS: Are some of the other medium-sized companies which will see massive growth in the future. Snap will change the way we shop by using AR and VR technology. PINS can provide a massive platform for digital marketing. These two stocks have seen some recent declines and can be very attractive to own with any further pullback.
3- NVDA: This company is a monster when it comes to innovation and is a must-own name for at least the next 5 years. NVDA will be a huge winner in metaverse technology and the semiconductor sector. I would like to own this stock at a recent price and buy more if it becomes cheaper.
4- Gaming sector: Everyone must own One of the quality names in the video game industry. Video game developers are soaring due to growing online player engagement. I like Take Two (TTWO), ATVI, and Electronic Arts (EA). Even after COVID, I don't see the video game industry slowing down or disappearing.
5- EV and Battery sector: EV evolution is not going to slow down any time soon. Investors must own quality names in this sector like Nio, TSLA, and RIVIAN. The world will need readily available charging stations and the most popular names are Chargepoint (CHPT), EVGO, Blink, and Volta (VLTA).
6- Toast: TOST is a brand new hot IPO. They provide a cloud-based platform to restaurants for point of sale and pay and order etc. The market cap is $ 24 Billion and was recently picked up by Ark invest.
7- Indie Semiconductor, Inc: INDI provides automotive semiconductors and software solutions. With the current increase in demand, this company is set for rapid growth in the near future. It's one of the smaller companies in market cap but I see some significant potential until the chip shortage subsides.
High risk /High reward Stocks: For people who like to take more risks, here is the list of some potential winners. Disclaimer, I usually don’t buy any of these high-risk names but I understand that people have different risk tolerance in the market. You should understand the risk with these kinds of names.
RKLB
TAL
TU
FUBO
BW
Please do your own research before buying any of my recommendations. Savvy investors know when to take profit and raise cash for the next correction or crash. If you are up significantly in some of the risky names, please take profit or sell the whole position. Avoid greed and buy some quality names when the market dips next time.
I don’t know when the next drop will be but it's long overdue. People will call it a crash, I call it a big opportunity. Hope it comes soon. It doesn’t mean I'm staying put and not buying when the opportunity comes. Stay in the game to play, you can’t win staying out.
Remember, it's not timing the market, it's time in the market that gives you massive returns in the long run.
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