Financial markets have come under significant pressure in 2022 as tough macroeconomic conditions, including 4-decade-high inflation and rising interest rates, led to bearish sentiment among stock investors.
However, circumstances started to improve at the beginning of 2023, triggering a rebound in the US stock market as investors welcomed declining inflationary pressures and lower interest rate hikes.
Weighing in on this matter on July 12, prominent stock investor and analyst Puru Saxena said the best time to invest is now, as stocks come out of a prolonged bear market. In fact, the expert outlined the most appealing stock category investors should consider betting on.
Notably, Saxena noted that “mega caps” – the largest publicly traded stocks – were the first to see inflows of investor capital after last year’s bear market. Meanwhile, younger growth stocks are still attracting poor sentiment, Saxena added, “which is a big positive.”
“The mega caps were the first to attract investment $$$ but now the younger growth stocks are breaking out of lengthy bases.”– Saxena said.
Saxena’s growth stock picks
Growth stocks refer to company shares that are expected to grow at a rate significantly faster than the average market growth. This is because these stocks belong to companies that have the potential to grow sales and earnings notably quicker than blue-chip stocks.
Since they are often trading at cheap valuations, growth stocks have the potential to deliver impressive returns to investors, assuming they grow at the expected pace.
In an earlier tweet, Saxena outlined several high-growth companies from his portfolio that have seen their revenues increase substantially from a year ago.
According to the analyst, “these companies are thriving,” and one cannot argue with that opinion given that most of these companies have experienced year-over-year growth rates of more than 40%.
On the other hand, growth stocks are also considered riskier investments compared to mega-cap companies such as Apple (NASDAQ: AAPL) or Microsoft (NASDAQ: MSFT). These giants tend to grow at a slower pace but are also seen as safer investments because they pay dividends and are better positioned to weather times of turmoil.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.