Video: The Best Stocks for the Best Returns
Alpesh Patel|January 7, 2022
The question on most investors’ minds is…
What does 2022 have in store?
Will it be another banner year… with record highs and big gains?
Or will inflation and rising interest rates drag the market down?
From where I’m standing… it doesn’t matter.
My system is designed to find winners no matter what the markets are doing.
And in 2022, I’ll be laser-focused on a specific group of stocks.
You can find out which kinds of stocks you should be looking for – and which to stay away from – in my latest video.
See where you should focus your attention this year by watching the video below.
Hi, everyone… Wishing you all a very happy and prosperous new year.
It’s been a very busy one for me, and I’ll come to that in a second.
But let’s look ahead to 2022 by, first of all, just looking behind what’s happened this year and what it tells us about what’s going to happen going forward.
Well, 2022 pretty much started the way 2021 did, which is all-time highs or thereabouts with S&P 500. So can we expect 2022 to continue giving us all-time highs? As we know, 2021… bumpy year. Will we have a similar year in 2022?
Well, despite the headwinds of inflation and rising interest rates, if I had to put my money on anything, I’d say, yeah, I would say we’re likely to get a similar kind of year. But my promise to you is this… Even if the market were to go sideways and just take a breather in 2022, the kinds of stocks I’m picking will be the ones where we are averaging that 35% to 55% return and the type where you’ve got a good smattering of triple-digit return stocks, because that’s what we’re after. And our job is to sift through.
So if the market does go sideways, we might have fewer stocks overall which are eligible for my portfolio and my picks, but that doesn’t matter, because we only need a couple of picks each month in order to get to our targets.
And what about what we’ve seen in 2021? Will that continue? Yeah, I think we’ll see this concentration in more of the quality companies. And we’ve seen this happen already. The number of companies where the money’s going to is becoming ever more concentrated. And I think in 2022, even if the markets move sideways, it won’t be that money leaves the stock market, it’ll be instead that money concentrates in the best quality companies. And that’s definitely what I’m seeing for 2022 continuing to happen.
What about returns? What kind of a year will it be in 2022? Well, if I had to put my money anywhere, I’d say it’s going to be in one of these three columns. You might say, well, it’s more likely to be 10% to 20% overall for the market. All I’m saying is, wherever it is, even in these four, anything even which is even positive, and I certainly expect that, will give us a good tailwind for our stocks to do rather well, the picks that we have.
The whole point of the picks that I make for Manward is that if there’s a tailwind, they should do even better. That’s the whole point of it. And what I also expect in 2022, and we’ve seen this trend last year as well, is we’ll see a continuation of buying the dip. So that’ll give a good support to our picks as well, give us some downward protection.
As for the upside, well, I think it’s going to be driven a lot by corporate profits. And the kind of companies that I look for, as you know, are profitable companies, companies with strong cash flows, good valuations, good profit growth. So we’re going to really be in the crosshairs of where we expect good returns.
And after all, and we saw in 2021, the market is definitely less interested in loss-making companies. And I think that trend will continue. I think the market will continue being less interested in loss-making companies. And those will be the companies that we’re not looking to pick anyway. So it suits us. And you can see unprofitable companies in 2021 really lagged their peers. We see this trend continuing in 2022, which fits really well into our thesis and the kinds of picks that we have in terms of profitable companies.
Am I worried that we’re at all-time highs? No, because we know this data from J.P. Morgan and FactSet that actually, whether you buy at all-time highs or invest on any day, actually you’re better off buying at all-time highs. So actually we think we’re really well positioned for 2022.
And if you’ve not already a member of my newsletter, you really should be because I think we’ve got a great opportunity here. And you can see here also the average annual returns after new market highs. After new market highs, they’re still very good. So for all of those people thinking, “Oh no, no, the market’s too high,” well, don’t forget – first we’re going to be trying to pick the best of the best of the best anyway. And secondly, the data supports the case that actually it’s not something necessarily to worry about, given the timeline holdings that we are looking at in any event.
What else do I expect in 2022? Well, look at all this. Every single one of these is an exchange-traded fund, and that’s the amount of millions of dollars gone into those. Every single one of these exchange-traded funds, rather, is inflation-related. So there’s a lot of money which is going to be tracking inflation.
I think those people are going to be disappointed. They’re not going to be disappointed in the sense that inflation won’t happen. I think they’re going to be disappointed that whilst inflation will be there, these kinds of funds are not going to be enough to protect them from the kinds of returns that they’re looking for.
So, sadly, I think they’re going to have parked their money into these marketing-gimmicked inflation ETFs, where, look at that, that’s in one week, that’s nearly a billion dollars that’s gone in there into these inflation-related funds in just one week. And the year-to-date flow… $35 billion. But these exchange traded funds, which are supposed to be giving inflation protection, I think at best, they’ll just give a mediocre return, if not a loss.
I continue expecting flows out of the U.K. And that’s why my picks will be U.S. in any event. And, well, as you can see here, market annual returns for the S&P… over 20%. I think we’re going to be in that year for 2022. I think we’ll be in this year. And you might think that’s extraordinary.
Well, let me put it this way. My picks will definitely be in that period. And even if you think the annual return might be a negative year for the overall market, well, I’ve got news for you – the idea with my picks is even in a negative year our picks should give a good solid return.
And I want you to remember this, as to why it’s really important what we are doing. The top 20% of earners own nearly all the stocks held by U.S. households. I want you to be in the top 20% of earners. I want you to be in the top 20% of the wealthiest people in your country.
In order to do that, what’s clear is you need to be holding stocks. The data supports it. This is from the Federal Reserve. And if you’re going to be that owner of wealth, you need to have not just rubbish stocks or gambling stocks or speculative stocks. You need to have the very best. And that’s my job.
And let’s not forget, when you do own those stocks, you own a large share of the world economy. This is the U.S. as a share of the world economy. That’s the United States in light blue. And it’s been growing. And I expect 2022 to continue that trend. And that means it’s more important than ever, if you want to be exposed to the world and global growth, that you’re exposed to those stocks, especially if want to be in the wealthiest in your country. And who doesn’t?
I will leave you with, however, one note of caution, since everything else has been so positive, which is this…
Yes, I am well aware about inflation. I am well aware of rising government debt. And that’s why we are picking individual stocks rather than just making broad brush gambles on the economy as a whole or wildly speculating on extremely high volatile instruments.
No, what we’re doing is looking for that safe and steady solid picks because we are well aware that there are headwinds such as mounting government debt, such as inflation, such as rising interest rates.
And all of these factors would mean that we want to make sure we have in our portfolio the best of the best, most resilient companies, most likely to grow, most likely to give us a buffer against the unforeseeable.
Thank you very much. And as I say, as ever, my job is to do the absolute utmost best in 2022 for growing your wealth. Thank you very much.
Want more content like this?