Don’t Fight the Fed! Invest in the Next Amazon Instead

First on the docket this week – we’re checking in on the Fed. After last week’s big rate-hike announcement, we heard some hawkish commentary from Fed Board Chair Jerome Powell. That really spooked the markets, and stocks have been in freefall ever since. But the central bank hiked as expected… so, why are investors freaking out right now?

Well, the markets were expecting a soft landing in the forecast, yet the Fed’s projections showed that the bank has no intention of pivoting. It’s much more concerned with the real economy, not the financial economy, and it’s keeping its foot on the gas until something breaks. The lesson here – don’t fight the Fed. Wait until it pivots, then get constructive on stocks again.

Short-Term Bears

In fact, we’re seeing evidence of a massive disinflationary wave building, and that will force the Fed to pivot sooner than it anticipates – which will, in turn, lead to a mega market rally. But as we wait for that to happen, we’ve turned bearish on the short term. We need a final massive capitulation selloff for these bullish things to happen. Historically, these grand finales mark the bottom in a bear market. One more fast-and-furious selloff could break some things in the real economy and force the Fed to reassess.

With that mega rally on the horizon, what stocks should we be buying to play this comeback? Growth stocks, baby. We’re talking climate tech, space, and robotics. These sectors are really picking up steam. In the broader markets, VC funding has really dried up lately – but that money is still flowing with climate tech. And there’s a lot of legislation powering this sector’s growth. We’re also seeing the continued deployment of robotics and automation in various industries across the market. Not to mention continued innovation in space. These are areas that hold huge potential for early stage investors, and we couldn’t be more bullish.

The Next Amazon: Best Stocks to Buy Now

Closing out this week’s episode, we leave off with some of the best stocks to buy right now, including “The Next Amazon.” These aren’t picks for the short term – they’ll go lower before they go higher. But we’re talking about stocks that go from $3, to $9, to $20, to $40 over the next two years. Long-term investors, buy the dip, and hold your nose. These will pay off big-time.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Article printed from InvestorPlace Media,

©2022 InvestorPlace Media, LLC