Best Shares to Buy in 2023
If you’re interested in learning how to identify what some of the best shares to buy in 2023 could be then you are in the right place. 2022 was full of wild market movements not seen for many years.
The collapse in global stock markets due to rising interest rates has now created some very interesting themes for 2023.
Keep on reading to learn more about the best shares to watch in 2023, as well as how to buy the best shares from all around the world with low commissions!
Table of Contents
Global List of Best Shares to Buy
Below is a quickfire list of what some of the best shares to buy in 2023 could be. Of course, no one can ever know what the best is beforehand as we can't predict the future. As always, make sure you understand that investing is about winning and losing. Investors aim to put the probabilities in their favour by following themes and trends within the market but risk management is even more important.
Of course, this list is not exhaustive and it’s worthwhile remembering that stock prices go up and down. Be sure to exercise good risk management and only invest what you can afford to lose and be sure to build the right emotional discipline when dealing with winning and losing trades.
The list of best shares to buy are stocks that have gathered the attention of analysts and larger institutional managers. The list serves as a great starting point to build upon using your own research or using the Premium Analytical tools in the Admirals Dashboard.
So, let’s take a look at the list before we explain the reasoning in more detail further down.
- ASML Holdings (ASML) - A Little Known Dutch Chip Maker Supplying the World
- LVMH (LVMH) - A Luxury Fashion Stock Overcoming Macro Headwinds
- UnitedHealth Group (UNH) - Largest Health Insurance Company in the US
- Amazon (AMZN) - A Potential Growth to Value-Based Stock
In the next sections, we dig a little deeper into each one of these companies and see what makes them worthy of being on the best shares to buy now list!
Best Shares to Buy UK and Europe
There are a variety of factors that could influence European stock markets this year. Challenges around inflation, energy prices and a possible recession will be watched throughout the year. Actions from central banks will also play a part in the trend of European and UK equities.
Analysts at investment bank Morgan Stanley believe cyclical stock earnings could fall by about 10% and are positioning portfolios with more defensive stocks for the start of the year. They have upgraded the medical, luxury goods and tech sectors. Interestingly, these sectors performed well towards the end of 2022 and will be ones to watch throughout 2023.
Let’s take a look at a few potential stocks for this year.
1. ASML Holdings (ASML) - A Little Known Dutch Chip Maker Supplying the World
While many investors may be familiar with semiconductor companies such as Intel and Nvidia, not many will have heard of the Dutch firm ASML Holdings. According to semiconductor analysts at Bain & Co, "ASML is absolutely critical to the entire semiconductor ecosystem."
The company was founded in 1984 and has more than 37,500 employees and a EUR 220 billion market cap. ASML Holdings is the only firm in the world that is able to make the complex machines that are needed to produce the world's most advanced chips. Each machine costs nearly $140 million, has more than 100,000 components and takes four jumbo jets to ship.
ASML's machines have the ability to create small shapes on silicon shapes. How small are we talking about? Down to 13.5 nanometres! The world's largest chipmaker TSMC (Taiwan Semiconductor Manufacturing Company), have used ASML's EUV machines in Apple iPhones which have more than 10 billion transistors on each chip.
The importance of ASML is undeniable. As chips are in everything nowadays, there could be more long-term growth yet to come. However, the semiconductor industry struggled over the pandemic with lower production and then lower demand over 2022. If these situations improve it could become a stock to watch.
With the Admirals Invest.MT5 account you can invest in thousands of stocks from 15 of the world's largest stock exchanges. You can open an account with as little as €1 and invest with fees on European stocks from just 0.15% of the trade value and a low minimum transaction fee of just 1 EUR.
This account also allows you to invest in fractional shares. This means you can buy 1/100th of a share on selected companies.
2. LVMH (LVMH) - A Luxury Fashion Stock Overcoming Macro Headwinds
While many stock sectors collapsed in 2022, some sectors managed to deal with the macro headwinds of higher inflation and interest rates better. One such sector was the luxury goods sector. While wealthier consumers tend to be more insulated from economic issues, luxury goods companies market their products well.
The largest luxury goods company is Paris-based LVMH (Louis-Vuitton Moet Hennessey). Its 75 brands include Louis Vuitton, Bulgari, Fendi, Hublot, Tiffany and others. As LVMH generate revenues from five different categories (clothing, watches and jewellery, wines and spirits, perfumes and cosmetics) they are considered to be well diversified.
Luxury fashion houses performed very well over the pandemic period. Not only did supply chain issues hike the prices up of their goods but higher wage growth in developed nations saw an increase in luxury fashion purchases.
While LVMH's revenues declined in 2020, they recovered well in 2021 with net profits increasing and have so far performed well in 2022 which recorded double-digit growth in all five of its divisions.
While LVMH could be considered one of the best shares to buy long-term the stock can also be used for momentum growth investing strategies. In this style of investing, there are a variety of ways investors can capitalise on a rising stock price as seen in the chart above.
The traditional form of investing involves purchasing shares of the company. Another option is to merely speculate on the rise and fall of a share price using Contracts for Difference (CFDs).
This product enables traders to trade on leverage (meaning you can control a large position with a small deposit) and also potentially profit from rising and falling markets.
With Admirals, you can open a Trade.MT5 account and trade CFDs on thousands of different stocks from all around the world.
Best Shares to Buy US Stock Market
The US stock market entered into a bear market in 2022 with many stocks and indices falling back to levels not seen since the 2020 pandemic. Is the pain over? According to the US Chief Equity Strategist for Morgan Stanley, US stock prices could fall in the early part of 2023 due to recession risks but recover later in the year as earnings improve.
Many analysts are focusing on defensive stock sectors such as consumer staples and healthcare companies. If the economic condition improves throughout the year, then tech stocks could attract even more attention. Identifying the difference between value investing and growth investing may prove to be important as the year unfolds.
1. UnitedHealth Group (UNH) - Largest Health Insurance Company in the US
Towards the end of 2022, analysts at Goldman Sachs turned overweight on healthcare and consumer staple stocks. Healthcare stocks can be tricky as they can be extremely volatile depending on how clinical trials go. Another way to invest in the healthcare sector is through the largest health insurance company in the US which is UnitedHealth Group.
Founded in 1977, the company has a market cap of more than $500 billion and (at the time of writing) a dividend yield of 1.25%. The company provides health insurance plans and health savings accounts for those in the US. Its long-term share price has only had a small impact from recent events, showing that the stock's resilience.
After such a big move higher, the stock may enter a period of consolidation. However, any meaningful pullbacks on the stock's price could be interesting for growth investors. Without any significant pullbacks, the stock could be more interesting for momentum-based traders.
2. Amazon (AMZN) - A Potential Growth to Value-Based Stock
Amazon was once the stock that could do no wrong. It was the leader in the growth style of investing. However, 2022 was a terrible year for Amazon. The stock price collapsed more than 50% lower from its record high in July 2021. With the stock falling below $100 in 2022 for the first time since 2020, many analysts have turned increasingly bullish on it.
At the end of 2022, according to data from TipRanks, there were still 33 buy ratings on the stock with 2 hold and zero sell ratings. The stock also sank below the lowest price target of these analysts which was $103. Analysts point towards the investment in its cloud computing service Amazon Web Services. The shift towards e-commerce and cloud computing is growing exponentially in which Amazon is a key player in.
While Amazon was always touted as a growth stock it is now exhibiting some value based characteristics. For example, the share price towards the end of 2022 became undervalued because the Amazon Web Services division (its cloud computing business) was worth more than the total value of the company. In December 2022, Amazon's market cap was around $950 billion while Amazon Web Services had a value of around $1.2 trillion.
With the MetaTrader 5 trading platform provided by Admirals, you can view live share prices while accessing a range of unique investing tools.
Best Shares to Buy Pros and Cons
2022 was a unique year in the financial markets. Not many analysts forecasted the events of the year. This is why it is important to build a diversified portfolio of stocks with a strong focus on risk management. Investing small amounts across a basket of stocks can help to diversify - not eliminate - the inherent risk of investing in publicly traded companies.
However, 2022 wasn't bad for all stocks. Many went on to reach new all-time highs. Identifying the themes that unfold over 2023 will be important to help diversify your portfolio. One of the biggest themes of 2023 will be the impact of a recession on the stock market which is being forecasted by many economists around the world.
Higher interest rates will affect economic growth. This is why many analysts are focused on building a defensive portfolio of stocks at the beginning of the year with a focus on moving into more cyclical stocks as the economic situation becomes clearer and starts to improve.
Some of the core themes to focus on when finding the best shares to buy in 2023 include:
☑️ Identifying the best stock sectors according to the economic cycle. This includes defensive sectors such as healthcare and utilities and cyclical sectors such as consumer goods and technology.
☑️ Finding companies that are likely to benefit from higher inflation which is forecasted to remain high for some time. This includes companies in the energy and commodity sectors.
☑️ Building a list of recession-proof stocks.
In each of these situations, there are companies that will benefit but some that will not. No one can ever predict with 100% certainty which shares will do the best and which ones will not but understanding bigger picture themes can help to provide an edge.
Stay up to date with the latest market trends through the free Admirals live trading webinar series where three times a week, three professional traders talk through the markets, providing you with the latest insights and strategies to use.
How to Find the Best Shares to Buy
Buying shares online is actually quite a simple process as our step-by-step walkthrough in a later section will show. However, identifying what shares to buy does require some skill, research and preparation. Even then, there is still no guarantee of success which is why risk management is important.
Best Shares to Buy: Focus on Risk Management
Beginner investors often put their eggs all in one basket expecting their decisions to always work in their favour. For example, an investor might have £10,000 to invest and may choose to invest it all into just one stock. This means there is no capital left if another - perhaps better - opportunity comes along.
Also, a sharp - yet temporary - fall may cause the investor to make an emotional decision and exit early, thinking about short-term fluctuations in price rather than the company’s long-term fundamentals.
One risk management technique used by many investors is to spread investments across different types of companies that operate in different sectors. When one sector is not performing well, another sector could be. This helps to build a more diversified and balanced portfolio that can help to balance out the effect of changing market conditions.
For example, an investor who has £10,000 to invest, may choose to invest £2,000 in five different companies throughout the year. Of course, the risk tolerance of each individual is different so it is worthwhile spending a bit of time building a plan on how you want to invest throughout the year.
Best Shares to Buy Analysis: Technical vs Fundamental vs Sector analysis
☑️ Fundamental analysis. This type of analysis involves analysing a company at a financial level. This includes metrics such as sales performance, earnings trends, debt levels, new product announcements, the economic environment and so on.
☑️ Technical analysis. This type of analysis involves analysing a company’s historical trading price via a price chart. Trading patterns and technical trading indicators can often leave clues on who is the most dominant force in the market (buyers or sellers), as well as pinpoint potential turning points in a company’s share price.
☑️ Sector analysis. As discussed in the previous risk management section, having options across different sectors can help in building a diversified and balanced stock portfolio. The criteria aims to identify companies from a range of different sectors such as banks, utilities, financials, energy, retail and so on.
How to Invest in the Best Shares to Buy in 3 Steps
Buying and selling shares online can be done in just three simple steps:
- Create a share trading account.
- Download your share trading platform.
- Open a trading ticket and take your first trade!
Let’s have a look at these steps in more detail for a step-by-step walkthrough on how to buy the best shares for beginners.
Step 1: Open your Admirals Invest.MT5 Account
You can open an online share trading and investing account with Admirals in just a few minutes. Simply click on the Start Trading button on the homepage and fill out a simple questionnaire that is standard for regulated brokers.
Once you’ve done this, you’ll get access to the Dashboard, where you can open demo and live trading or investing accounts, manage deposits and withdrawals and access additional investing tools.
Step 2: Open your Investing Platform
From the Dashboard homepage, simply select Trading Platforms on the left-side menu. This will then give you access to download the MetaTrader 5 trading platform for PC and Mac but you can also use the Web Trader platform as well where you can trade directly from your browser.
Simply follow your computer’s prompts to complete the download of your MetaTrader 5 share trading platform, if you want to access additional features like automated share trading from the MetaTrader Market place.
Step 3: Place your Trade!
Open up your share trading platform and follow these steps to place a trade:
- Open the Market Watch window by selecting View from the menu at the top of the platform or by pressing Ctrl+M on your keyboard. This will open up a list of tradable symbols on the left side of your chart.
- Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
- This will then open the window shown below which details all the markets available for you to trade on. From here you can add a wide variety of shares to your Market Watch window by selecting the relevant share or country and clicking Show Symbol.
After clicking the OK button in the Symbols window you can now view the different instruments in the Market Watch window. To view a price chart of a company’s share price, simply left-click on one of the stock symbols in the Market Watch window and drag it onto the chart area. From here you can now open up a trading ticket:
- Right-click on the chart.
- Select Trading.
- Select New Order, or press F9 on your keyboard.
- A trading ticket will open for you to input your entry price, stop loss and take profit levels and your share trading size (volume).
Why Buy Shares Online with Admirals?
Here are just a few reasons why you should consider buying and selling shares with Admirals:
✔️Trade with a well-established, regulated company which includes regulation from the UK’s Financial Conduct Authority.
✔️Access the fastest and most popular online share market trading software called MetaTrader which you can use on PC, Mac, Web, Android and iOS operating systems.
✔️Open an Invest.MT5 account with just €1 minimum deposit and invest from just $0.02 per share with minimum transaction fees of just $1 on US stocks.
✔️Open a Trade.MT5 account to trade CFDs and potentially profit from both rising and falling markets while trading on margin.
One of the best ways to get started is to simply test all of the features, products and services provided by Admirals for yourself.
You can do this by opening a FREE demo trading account that enables you to trade and invest in a virtual trading environment until you are ready to go live! ▼▼▼
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
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