Here are three factors that will sustain stock prices

To say that 2022 has produced tectonic events globally is an understatement. The political and economic environments that we have experienced over the past six months are challenging decades-old frameworks.?

Our approach to investment doesn’t hang on the state of macro-economic issues such as the ones we’re seeing today, for example- inflation. Companies with certain key attributes enable them to continue to deliver healthy returns to their investors amidst the economic pressures of the day. Here are 3 of them:

1. An ability to increase prices - an obvious advantage.
2. High margins, offering greater protection.
3. High incremental return on capital.

Where do megatrends come in?

When these attributes are found in companies that are fuelled by strong tailwinds we call megatrends, we can be confident of enduring profitability.

Whether it’s the rise of Gen Z, the acceleration of spending on skin and beauty, or the innate human desire to invest in experiences - companies tied to megatrends provide growth opportunity and consistency in earnings, which in turn strengthens stock price.

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