Safety May Be the Best Option in 2022

Throughout 2020 and 2021, we bemoaned the Fed's sluggish response to inflation and extreme focus on the labor market. Now here we are in 2022 and the massive surge in prices has finally changed the Fed's calculus. Throughout 2020 and 2021, we bemoaned the Fed's sluggish response to inflation and extreme focus on the labor market. Now here we are in 2022 and the massive surge in prices has finally changed the Fed's calculus. [Outsider Club logo] Safety May Be the Best Option in 2022 [Jason Simpkins Photo] By [Jason Simpkins]( Written Jan 07, 2022 Just days into the new year we're off to a rough start, as the market has stumbled out of the gate. The tech sector has been hardest hit, with the Nasdaq plunging 4.5% since Tuesday. The broader S&P 500 has shed about 2% in that time, and the Dow has proven most resilient with a 1% decline. It's too early to read much into this. It could mean a lot, or it could mean little. But at least in the early goings, it looks like a cyclical shift away from growth stocks and into larger, steadier businesses. That would align with a Federal Reserve that has suddenly turned hawkish. Throughout 2020 and 2021, we bemoaned the Fed's sluggish response to inflation and extreme focus on the labor market. Now here we are in 2022 and the massive surge in prices has finally changed the Fed's calculus. First, Fed Chairman Jerome Powell announced the Fed would slow down its bond purchases (after sucking up trillions in Treasuries and mortgages). And then, just a few weeks later, he announced it'd accelerate that process. That coincided with an FOMC meeting, which telegraphed three potential rate hikes this year. Now it seems everyone on Wall Street has come back from their Christmas vacations and they're adjusting their holdings accordingly. The #1 Strategy for Biotech Stocks? It’s no secret that biotech is the most exciting investment arena there is. There’s never a shortage of demand for new treatments for the world’s worst diseases, like cancer, Alzheimer’s, and arthritis. And with my new trading system, “Project Greenlight,” you’ll always know with up to 95% confidence which of those new medicines will be approved by the FDA and which won’t... This could set investors up to make six figures or more in biotech profits. And right now, there's a tiny biotech firm trading for pennies on the dollar with a medicine that’s on the brink of FDA approval... [Learn more about this unique opportunity today.]( That's meant abandoning small companies and tech startups that rely heavily on debt to finance growth. And it means moving into companies like banks, energy, industrials, and commodities, which benefit from inflationary pressures and risk aversion. No doubt, banks that were able to absorb billions of free dollars from the Fed can now begin to loan that money out at higher and higher rates. Energy stocks will benefit from higher prices and steady demand. So too will industrial companies which are seeing demand build behind kinks in the supply chain. So long as the economy continues to shake off COVID variants and the labor market stays tight, consumer spending will remain strong as well. And the housing market, despite surging 20% last year, is poised to remain hot with another round of double-digit growth in 2022. All of this is good news for those Dow Jones giants — companies like Caterpillar (NYSE: CAT), McDonalds (NYSE: MCD), WalMart (NYSE: WMT), Home Depot (NYSE: HD), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Chevron (NYSE: CVX), and American Express (NYSE: AXP). Those are all good and safe bets, as they have been for years. Commodities are in line for more gains, as well. As has been the case for nearly two years now, demand is there, and supplies are not. Food prices will continue to climb higher, driven by higher costs for meat, grains, and fertilizer. (Note: My colleague Luke Burgess has been right on top of the food scarcity issue and recently uncovered a small company that's sitting on one of the world's most important mineral deposits. You should [check that out here](.) Gold, which had a down year considering 2021's massive inflation spike, should return to favor as well, bolstered by market volatility. Oil and gas continue to be elevated by supply disruptions, global instability, natural disasters, and abundant demand. So basically, while tech is suffering, most everything else should perform rather well. New Robot Has Tech Execs Scrambling You might not believe this is even real, but I assure you this video has been left unedited. Nearly every tech company in the world is scrambling to get its hands on this tech. And investors are set to profit handsomely. Get the details on [our Top 3 Stocks Picks here.]( And that's really because the Fed raising rates is a good thing. It shows that our economy is strong enough to stand without so much artificial support. Record-high stock prices, bountiful corporate revenues, soaring commodities prices, a red-hot real estate market, and resilient consumer demand and jobs numbers have made that perfectly clear. It's time to start walking on our own two feet again. Enough hand-holding from the Fed. Naturally that will mean taking some wobbly unsure steps, maybe even falling down once or twice. But these are growing pains investors must endure — or better still, exploit. All last year I told readers to seize on corrections as buying opportunities. And anyone who did that made out quite well. The same thing is true now. Buy the dips. And if you're a long-term tech investor you've got a lot of bargain shopping to do. Fight on, [Jason Simpkins Signature] Jason Simpkins [follow basic]([@OCSimpkins on Twitter]( Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's [page](. *Follow Outsider Club on [Facebook]( and [Twitter](. Browse Our Archives [The 2022 Energy Reckoning: Reality vs. Expectation]( [Biden's Worthless Plan to Lower Food Prices]( [Your 2022 Flight Plan]( [What's Wrong With Gold?]( [Don't Drop the Ball]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here]( and view our privacy policy and information on how to manage your subscription. 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