The Federal Reserve’s decision to tighten its monetary policy, rising inflation, supply chain bottlenecks, and the threat of the COVID-19 omicron variant are expected to keep the stock market under pressure in the near term. Therefore, we think it could be wise to bet on fundamentally-sound mega-cap stocks UnitedHealth (UNH), Walmart (NYSE:WMT), Oracle (ORCL), Cisco Systems (NASDAQ:CSCO), and Broadcom (AVGO). These stocks are well-positioned to withstand market fluctuations and deliver stable returns. Let’s discuss.Although solid third-quarter earnings, declining jobless claims, and rising consumer spending drove the markets to fresh highs last month, the emergence of a highly infectious new COVID-19 variant, high inflation, geopolitical tensions, supply chain constraints, and the Federal Reserve’s decision to taper its bond purchasing have been fostering worrisome market volatility of late. Because these factors are not likely to dissipate soon, betting on mega-cap stocks with exceptional growth potential and strong fundamentals could be an ideal strategy to hedge one’s investment portfolio against the expected market fluctuations.
Mega-cap stocks, which possess a market capitalization of $200 billion or more, have the potential to dodge short-term fluctuations and deliver stable returns. Also, favorable policies to encourage domestic production and ongoing efforts to address supply chain issues further enhance mega-cap stocks’ growth prospects.
Prominent mega-cap players UnitedHealth Group Incorporated (NYSE:UNH), Walmart Inc. (WMT), Oracle Corporation (NYSE:ORCL), Cisco Systems, Inc. (CSCO), and Broadcom Inc. (AVGO) have the potential to capitalize on their respective industry tailwinds and deliver stable returns. Given their solid combination of value and quality, we think these stocks can be reasonably characterized as “no-brainers.”