Investing in ASX shares in 2022 has not been for the faint-hearted.
Inflation and interest rate worries have paralysed the market for the whole year, while Russia's war in Ukraine and surging energy prices have just poured petrol on the volatility fire.
Now, as Australians and Americans face higher mortgage repayments, there are fears that economies will fall into recession — and that it's a sacrifice central banks are willing to accept to stop high inflation becoming entrenched.
Scary times.
In such turbulence Switzer Financial Group director Paul Rickard suggests that buying into the "safer" reliable companies might be an idea.
"[Buying] the stock that was $10 and is now 50 cents, hoping that's going to rebound, that's a high-risk strategy for me," he told Switzer TV Investing.
"I'd rather stick to a couple of quality companies. And there are a couple out there that I think are showing reasonable rounding-type behaviour and are trading okay."
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The company to boom when the economy recovers
Rickard's first pick is investment bank Macquarie Group Ltd (ASX: MQG).
He noted the stock has come up about 7% off its low in mid-June, which is impressive resilience considering the rest of the ASX has plunged in that time.
"The other reason why I like Macquarie is you know it's got a great underlying business. You know that there are some pretty smart operators in Macquarie."
According to Rickard, the firm has a "good mix" of market-exposed investments and its fast-growing retail banking business.
Like most investment banks, Macquarie does have some downside if the economy plunges into a recession or even a severe slowdown.
But beyond that there is plenty of upside.
"If the economy recovers and activity picks up… I'd say Macquarie's a big beneficiary."
A reliable trio from a growing sector
Healthcare is a sector that Rickard favours at the moment.
He noted that in the US healthcare is often seen as a defensive sector, while Australia's product-focused companies give the industry a growth flavour.
And certainly with the current market sentiment so hostile towards technology, Rickard feels like growth shares in health could benefit.
"Companies like CSL Limited (ASX: CSL), Resmed CDI (ASX: RMD) and Cochlear Limited (ASX: COH)… I think there's good value there," he said.
"Again, they're all stocks that aren't going down and, if anything, companies like Resmed and Cochlear have been creeping up, as has CSL."
With reporting season coming up next month, Rickard said that these companies have a history of "surprising on the upside".
"The lower Australian dollar is helping as well."
