A Few of John Buckingham’s Favorite Stocks for 2022
In John’s recent interview with Think Advisor, he discusses the stock market outlook plus his favorite stocks for 2022.
Stay The Course
After gaining more than 120% between March 23, 2020 and January 3 of this year, the S&P 500 index, a benchmark of the 500 largest companies in the U.S., has fallen nearly 20% over the last four months. In addition to the War in Ukraine, a sharp uptick in inflation, which has been climbing rapidly for a year and hit a high of 8.5% in March, has weighed on consumers and businesses, and led the Federal Reserve to hike interest rates as it tightens monetary policy.
While some investors may be thinking they should head for the hills, our latest Special Report offers perspective gleaned from 45 years of navigating the equity markets.
Inflation and Rising Rates
There always seem to be frightening headlines with which equity investors must contend, the Omicron variant the latest, yet the asset class historically has generated excellent long-term returns for those that remember that the secret to success in stocks is not to get scared out of them. Easier said than done, we know, especially with the talking heads on financial television and editors of business publications competing 24/7 for attention, one day raving about the latest market rally and the next warning of impending doom.
These days, inflation and the Federal Reserve seem to be providing plenty of investor consternation. In this report, we examine the historical evidence for equity returns versus CPI rates, Fed Tapering and rising interest rate environments. We think readers will find the data eye-opening, plus we offer a dozen of our current Value stock favorites.
Morningstar Stars: 5 Star Supernovas
Warren Buffett states, “In the business world, the rearview mirror is always clearer than the windshield.” And even though investors are constantly bombarded with the standard compliance warning that past performance is no guarantee of future performance, it should come as no surprise that many can’t help but chase the hottest asset class, sector or stock, often to their financial detriment.
In this Special Report, we discuss Morningstar’s rating system and remind that we think the best advice is to find a strategy with a history of success (Value and Dividends, perhaps?) and stick with it through thick and thin!
Don’t Forget About Value
There was a renewed enthusiasm for stocks in the Value camp in January, but we think that Value should always be front and center. Nearly a century of data, academic research and our own quantitative research support our affinity for bargain-priced securities.
The Most Wonderful Time of the Year
With the calendar about to roll past Halloween, we look forward to the start of the seasonally favorable six-month time span. While we have long thought that the only problem with market timing is getting the timing right, and we are always focused on the long-term prospects of our stocks, we do not mind that November to April is the period in which the equity markets typically perform well.
To learn more about what history has to say, and to see 12 stocks that we presently find undervalued, we encourage you to peruse our latest Special Report, The Most Wonderful Time of the Year. We hope it will bring you holiday cheer!
2022 Market Outlook
In our latest special report, we detail seven themes and specific stocks which we think those who share our long-term view should be considering as we head into 2022. True, there is a litany of what we believe to be inexpensive names, but one must still construct a diversified portfolio of these equities. And perhaps more importantly, as the secret to success in investing is not simply to select good stocks, but to not get scared out of them, we offer the reminder that we also make our nerves of steel available via our wealth management services.
The Most Important Charts for 2022
In this TPS Special Report, we offer 11 of the most important charts for 2022, covering top-of-mind themes such as market pullbacks, inflation, expensive valuations, volatility and rising rates.
5 Dividend Aristocrats to Consider Today
Oil titan John D. Rockefeller once quipped, “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” Decades later, we continue to find significant appeal in dividend stocks as low interest rates for developed markets around the globe plague income-oriented investors, while sustained inflation threatens to erode our purchasing power. And while paying a dividend is not a criterion for every stock we own at the The Prudent Speculator, the yields on our portfolios rival that of the Russell 3000 Value index, which sports a dividend yield north of the yield-to-maturity on the 10-year Treasury. In addition to the income we receive, a company’s dividend track record might also say a thing or two about its stewardship of capital, durability and regard for shareholders.
Value Manager Names His Faves: 6 Themes, 24 Companies
In Value Manager Names His Faves: 6 Themes, 24 Companies, John discusses our value-based investment philosophy, while also offering favored areas of the equity market in which to invest and specific stocks that he and the team find particularly attractive.
Death & Taxes, but Not Death from Taxes
We think the tax rate analysis is eye-opening and, as is often the case, we believe it supports an emphasis on Value stocks in one’s asset allocation mix. We like the perspective offered by Vannevar Bush, “Fear cannot be banished, but it can be calm and without panic; it can be mitigated by reason and evaluation,” and we think this quick-read report is well worth a look.
We even offer a listing of 10 undervalued stocks that are already paying an elevated tax rate, suggesting that their bottom lines might not be so heavily impacted by a hike in the corporate tax rate.
Epidemics: COVID-19 Not the First, Nor the Last
In this report, we offer perspective on epidemics and the equity market turbulence associated therewith as we have long believed that the secret to success in stocks is not to get scared out of them, while we are always focused on the long-term, multi-year prospects of the businesses in which we are invested. Happily, capitalism’s immune system is quite strong.