As stock markets worldwide plunge on pandemic concerns, I have been looking for FTSE 100 shares to buy for my portfolio to take advantage of the market environment.
There are a handful of businesses I plan to add to my portfolio. I think these companies have tremendous prospects in 2022, but it does not look as if the market is aware of their potential.
As such, here are my FTSE 100 shares to buy today for income and growth in 2022.
FTSE 100 shares to buy
Last week, shares in the UK’s largest lenders jumped after the Bank of England increased interest rates. However, they have given back some gains in recent trading sessions. As such, I would take advantage of the current market environment to buy shares in NatWest and Lloyds.
These are two of the largest banks in the UK and should be able to enhance profitability, thanks to rising interest rates and the improving outlook for the economy.
Along the same lines, I would also acquire equipment rental company Ashtead. This operation has a fantastic business model. It is able to buy equipment at a reduced price and earn handsome returns by renting the tools out to users.
Profits have jumped over the past year as the construction sector has rebounded from the pandemic. I think this trend will continue, especially as the construction sector is booming.
The biggest challenges NatWest, Lloyds and Ashtead may face going forward are the prospects of further pandemic restrictions on the economy. This could impact economic growth and hurt their prospects over the next couple of years. I will be keeping an eye on these challenges as we advance.
Expanding financial sector
As well as these companies, I would also take advantage of the recent market decline to buy shares in the London Stock Exchange Group and St. James’s Place.
Shares in the former have been under pressure, due to investor concerns about its most significant acquisition over the past year. The costs of this deal have increased beyond expectations, putting pressure on profits and profit margins.
However, when the merger is complete, the FTSE 100 firm will offer consumers an unrivalled package of data and trading services. This long-term potential leads me to conclude that I would like to add this stock to my portfolio.
Meanwhile, St. James’s could benefit from the rising demand for wealth management services across the UK. As the cost of maintaining a wealth management business grows, smaller establishments are pulling out. This company has the size and scale to navigate the regulatory challenges. This suggests it could move into the gaps left by competitors.
While these companies have plenty of attractive qualities, they will undoubtedly face some significant challenges as we advance. These may include additional regulatory challenges, more competition and rising wages bill, which could hit profit margins.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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.