I reckon there’s a high chance 2023 will be better for stocks and shares than 2022 has been. And there are many FTSE 100 shares I’d buy now to play the coming bull market.
It’s possible for my optimism to be misplaced, off course. Inflation may not fall as expected. Perhaps labour strikes will be an ongoing feature of the economic landscape. And the war in Ukraine could escalate further instead of marching ever closer to its conclusion.
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Maybe commodities like oil, lumber, wheat, oats and others will reverse their price declines and shoot back up again. And Drewry’s composite World Container Index could rocket to new highs instead of continuing its fall. Or some other unknown crisis like previous pandemics, wars and geopolitical events may happen to derail stock markets.
Businesses performing well
However, right now I’m optimistic. And, to my reading of the situation, all those things have been improving and not worsening. So I’ve been buying shares to hold through 2023 and beyond into the long term.
And the FTSE 100 is a well-stocked hunting ground. I wouldn’t buy all the stocks in the index. But many have lower valuations because of the bear market we’ve experienced in 2022. Yet their underlying businesses have been performing well. And the directors of lots of businesses have been issuing upbeat outlook statements.
I’m fully invested right now. But if I had spare cash, I’d be considering stocks such as DS Smith. The company provides sustainable packaging solutions, paper products and recycling services worldwide. And there’s a chunky dividend yield for investors to collect.
There is competition in the sector. And the industry is vulnerable to cyclical economic forces. But Smith has a decent record of financial numbers and has been trading well. I think the business looks poised to thrive as the general economic environment hopefully improves in the years ahead.
Cyclical opportunities
But I also like the look of financial services provider Legal & General. The company comes with a high-single-digit percentage dividend yield and a low-looking valuation. But that could be signalling that the market is worried about the inherent cyclicality in the industry.
Yet I’m optimistic and believe the business can prosper over all timeframes. Meanwhile, City analysts have pencilled in modest, single-digit earnings increases for this year and next.
Finally, I’m keen on the banking giant HSBC Holdings. It’s perhaps one of the most cyclical businesses investors can part-own via shares. And that means there are risks for those planning to hold the stock long term.
However, banks stocks are often among the first to plunge when economic downturns arrive and the first to recover on the other side. And I reckon the market will look beyond the current weakness in economies towards the recovery beyond. And, for me, that’s bullish for HSBC.
Meanwhile, City analysts have pencilled in double-digit increases in earnings for the current year and for 2023. And there’s a chunky dividend for investors to collect.
There are no certainties or guarantees that these three FTSE 100 stocks will perform well for me in 2023 and beyond. But I’d embrace the risks and buy them now.
