It should perhaps come as no surprise that the global markets plunged sharply at the beginning of Q2, thanks to a combination of rising inflation and concerns about the wider health of the global economy).
Inflation in the UK is now above 7% (its highest rate since 1992), with this contributing to a significant decline in the FTSE 100. This index fell to its lowest level in eight weeks on Monday, declining by 2.32% or 171 points to 7,216.
We’ll explore the depreciation of the markets in more detail below, while asking which stocks you should consider investing in right now!
Why are the Major World Indices in Decline?
From a global perspective, US stocks have recorded their worst first-half performance in more than 50 years, with the wider uncertainty and volatility in the markets being exacerbated by the efforts of central banks to raise interest rates.
While it’s widely known that there’s an inverse relationship between inflation and interest rates and hiking the base rate will drag inflation down in the long-term, this is also compounding issues in the short-term by increasing the cost of borrowing and making it considerably harder for businesses to invest in growth.
So, it’s no surprise that the world’s stock markets have plunged during the first six months of 2022, with a staggering $13 trillion having been wiped off the MSCI World Equity Index during this period.
Interestingly, bonds have also endured a grim 2022 to date, making it difficult for investors to build a successful portfolio!
Is Stock Market Investment Still Advantageous for Investors?
Despite these trends, there’s no doubt that stock market investment remains advantageous for traders.
There are a couple of reasons for this. Firstly, you can access flexible stock market investments such as CFDs, making it possible to speculate on price movements and generate potential returns without owning the underlying financial instrument.
This also makes it possible to profit from the market’s increased volatility, which is a key consideration in the current economic climate.
If you choose a longer-term investment option such as a buy-and-hold strategy, this enables you to ride out temporary market fluctuations and downswings. To this end, the S&P 500 posted positive returns for investors over most 20-year periods through history, particularly when targeting blue chip or dividend stocks.
But what are the top three stocks to consider investing in right now (and with these points in mind)? Here are some options to keep in mind:
- Northtrop Grumman Stock: This stock fell below its previous buy point of 477.36, creating a potential opportunity for value investors who want to optimise their spend and realise profit over an extended period of time (and once the market recovers).
- Dollar Tree Stock: This stock is currently actionable above a 166.45 cup-with-handle buy point, while its relative strength line has continued to inch higher in recent weeks. Shares have also moved back above the 50-day moving average, offering a clear technical indicator of future value.
AstraZeneca: With a market cap value of $172.45 billion, AZN stock is always a highly valuable option (especially as Covid-19 continues to rage). It’s currently trading below a 67.50 buy point but has seen its relative strength line thrive since December, so it may offer increased value for the remainder of 2022.