‘We’re close to the bottom’: Expert flags share market sectors to buy before the rally

It’s been a rough year for investors. Luckily, this expert believes global markets are about to rally.

| More on:
An ASX200 market analyst holds his hand to his chin and looks closely at his computer screens watching share price movements

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Global markets are nearing their lowest point and gearing up to rally, according to deVere Group boss Nigel Green 
  • He believes buying into sectors like energy, infrastructure, commodities, pharmaceutical, and consumer staples "makes sense" ahead of the predicted rebound 
  • However, the expert warns investors should be "judiciously" keeping an eye on shifting economic landscapes and trends 

Friday has brought good news for embattled investors. DeVere Group CEO and founder Nigel Green has tipped that major global indexes – such as the S&P/ASX 200 Index (ASX: XJO) – could be nearing their lowest point and getting ready to rally.

“The markets have been shaken in recent months, but now I’m calling it: the bottom is very close,” Green says.

And he’s flagged the sectors he thinks will provide buyers the biggest bounce. So, where does Green suggest investors put their money to best ride the recovery wave? Let’s take a look.

Is the ASX 200 gearing up for a rebound?

The ASX 200 has tumbled 6.38% since the start of 2022. While its downturn has likely disappointed many Australian investors, it’s fared better than other global markets.

As deVere Group’s Nigel Green points out, Wall Street has endured far greater suffering. The S&P 500 has tumbled 15% year to date while the Nasdaq Composite has fallen nearly 26%.

“The market downturn has been pretty brutal,” Green admits, “but I’m confident that we’re close to the bottom.”

“With a bounce on its way, investors should be positioning portfolios to take advantage of the rally.”

The deVere boss says it “makes sense” for investors to get exposure to sectors like energy, infrastructure, commodities, pharmaceutical, and consumer staples with strong branding ability.

Of course, those sectors are represented on the ASX 200 by the likes of energy share, Woodside Energy Group Limited (ASX: WDS) and, in infrastructure, toll road operator Transurban Group (ASX: TCL).

BHP Group Ltd (ASX: BHP) is the ASX 200’s largest commodity play while healthcare stock Telix Pharmaceuticals Ltd (ASX: TLX) represents the pharmaceutical sector.

Finally, ASX 200 retail giant Wesfarmers Ltd (ASX: WES) is behind both Bunnings and Kmart. The pair both sit among Australia’s most trusted brands.

While Green’s predictions of an upcoming rally will likely be met with excitement, he warns it’s not the time to throw caution to the wind.

“It’s not just about piling into lower-priced, high-quality investments; it is also about buying judiciously and being aware of the shifting economic landscapes and trends,” he said.

“Portfolio diversification is key and plays an essential role in managing volatility.”

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

workers stand over a large spool of copper pipe.
Share Market News

ASX copper shares in the red as copper price sinks to 19 month low

Copper prices fell in global markets overnight.

Read more »

Man with rocket wings which have flames coming out of them.
Share Market News

EML share price leaps 16% on Spanish government stimulus contract

EML shares are on fire on Wednesday...

Read more »

Share Market News

ASX 200 midday update: BHP and Fortescue sink, EML and ZIP jump

The ASX 200 is having a difficult day due to weakness in the mining sector...

Read more »

Business woman watching stocks and trends while thinking
Share Market News

5 things to watch on the ASX 200 on Wednesday

The ASX 200 looks set to have a tough day on Wednesday...

Read more »

Share Market News

Here are the top 10 ASX shares today

Here are your top 10 biggest gainers in the ASX 200 on Tuesday.

Read more »

A man in business suit wearing old fashioned pilot's leather headgear, goggles and scarf bounces on a pogo stick in a dry, arid environment with nothing else around except distant hills in the background.
Share Market News

Why the ASX 200 is rallying after the RBA’s rate hike today

The benchmark index has lifted in the face of the interest rate hike today.

Read more »

A police office points their detector at a speeding car, this one is going to get a speeding ticket.
Share Market News

IOUpay shares issued a speeding ticket after rocketing 55% today. What happened?

It has been a rollercoaster ride for IOUpay shareholders on Tuesday.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Share Market News

ASX 200 midday update: Regis Resources jump, big four banks fall ahead of RBA meeting

The ASX 200 is on form again on Tuesday...

Read more »