Many global stock markets have experienced quite the wobble this year. That’s why I’m looking for the best shares to buy before the market rebounds.
Now, it’s still uncertain when the stock market will fully recover. High inflation is the biggest challenge facing the world’s central banks. And their policy to tackle rising prices could cause a deeper recession.
But I’m looking further ahead. As a long-term investor, I want to know which shares to buy and hold that could thrive over the coming years.
Top shares to buy
At the top of my list is the most valuable company in the world, Apple (NASDAQ:AAPL). This is a high-quality business.
Even renowned investor Warren Buffett likes these shares. That’s despite having avoided technology stocks for many years.
So much so, more than 40% of Buffett’s Berkshire Hathaway (NYSE:BRK-B) portfolio is now composed of Apple shares. That is quite some conviction.
And I can see why. It has one of the strongest and most recognisable brands in the world. Apple also runs a closed ecosystem, making it very difficult to switch to competitors. That results in customers that remain for years, providing Apple with significant repeat business.
Buffett once said, “in business, I look for economic castles protected by unbreachable moats”. The moat he refers to is a solid competitive advantage. And for Apple, that’s brand loyalty, in my opinion.
A word of caution, however. Rising energy and food costs might lead to tighter pockets for many consumers. And some might think twice before upgrading their phones and laptops, or some customers might delay their purchases.
Overall though, this is a cash-heavy and resilient business. I already own some of these shares but I’d be more than happy to buy some again before the market rebounds.
From apple to bread
When looking for the best shares to buy, I like seeing businesses that have a strong customer proposition. Whereas Apple targets the premium end of smartphones, my next share targets the value end of baked goods.
I speak of England-based bakery chain Greggs (LSE:GRG). Like Apple, it has built a strong brand throughout the country, even gaining a cult-like following from parts.
Recent sales have been encouraging. For the six months to 2 July, pretax profit was higher than the year before. That’s despite higher operating costs.
Rising energy, staffing, and commodity prices has put pressure on many businesses. And Greggs is no exception.
That said, it was able to raise prices accordingly without seeing a drop-off in demand. That’s exactly the type of pricing power that I like to see.
As incomes get squeezed later in the year, many businesses could see a fall in demand. But Greggs offers low-value products. The average spend in a store is just £4, and I feel that customers are unlikely to alter their spending behaviour if Greggs needs to add a few more pence to their sausage rolls.
Greggs has a strong balance sheet and plenty of cash flow. It’s also planning to open around 150 new shops this year. Given its resilience, I reckon these are exactly the type of shares I’d buy for my Stocks and Shares ISA.