5 of the best shares I’d buy now for the stock market rally in 2022

Inflation might be reversing! That’s why I think now’s a good time to start filling my Stocks and Shares ISA with the best shares.

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The time to buy the best shares for a stock market rally may be right now. While inflation hit a new high last month, early signs of reversal emerged. Oil prices and mortgage rates have started to tumble. And if this trajectory continues, energy bills might soon follow suit.

Given these three expenses are what seem to be at the top of analysts’ recession concerns, any improvement could spell bright times ahead in the second half of 2022 and beyond.

So with that in mind, here are five companies that I’m currently considering for my portfolio.

The best shares within a rapidly expanding industry?

If consumer budgets start getting looser, spending on discretionary items like video games may be set to make a comeback. There are plenty of development studios worldwide, each with an impressive portfolio of titles. But I think the best shares in this space are Keywords Studios and Frontier Developments.

The latter is responsible for several popular franchises, including Elite Dangerous, Planet Zoo, and Jurassic World Evolution. And soon it will be adding Warhammer and Formula One to its portfolio, with new games set to be released in the coming months.

Keywords Studios, on the other hand, is rather unique. Instead of developing games, it provides the talent required to other leading development houses around the globe.

I’m not blind to the risks. Video games are expensive to make, and if a title flops, it can have disastrous financial consequences. Keywords is less exposed here since its revenue isn’t dependent on title success. However, suppose the reason for failure was due to a poorly skilled team provided by the firm to one of its clients. In that case, that could compromise any future collaborations.

Yet, with both delivering solid double-digit growth, I’m keen to top up my existing positions in these companies.

What if the rally doesn’t come?

Even with the early signs of price reversal, a recession could still be on its way. In fact, one may have already started. But are there businesses which can thrive regardless of whether a stock market rally turns up later this year? In my opinion, yes.

One expense that consumers can’t eliminate, regardless of financial conditions, is healthcare. Suppose an individual is unfortunate enough to be battling an illness. In that case, access to medical care is essential, irrespective of the price. That’s why I think AstraZeneca, Hikma Pharmaceuticals, and Smith & Nephew could be some of the best shares to buy now.

Each firm specialises in biotech, generics, and medical devices respectively. This makes a nice little stock basket that covers a large portion of the healthcare industry. And with each one an established leader in their respective expertise, the profits keep on flowing even with all the disruptions seen over the last two years. Yet despite this, the share price of the latter two are down by double digits, indicating a buying opportunity for my portfolio may have emerged.

It’s far from risk-free, of course. Healthcare is a highly regulated industry that can make it exceptionally difficult to get new products onto the market. Not to mention the legal and reputational ramifications should a company breach the rules.

But with long track records of success, I’m willing to take that risk for my portfolio.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Zaven Boyrazian has positions in Frontier Developments and Keywords Studios. The Motley Fool UK has recommended Frontier Developments, Hikma Pharmaceuticals, Keywords Studios, and Smith & Nephew. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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