What is the current health of the financial sector?

The financial services industry is often seen as boring by many investors, but in reality, the industry has shown an innate ability to adapt to uncertainties that have not been seen in more than a decade

The stimulus of rising inflation, rising interest rates, slowing supply chains, geopolitical crises and other uncertainties are bound to bring greater volatility, all of which will undermine the relative stability established after the pandemic.。How banks and their financial service providers can survive such consequences？Cutting costs is not the only answer.。Leveraging technology and enhancing innovation is bound to be part of the solution

What is the future of the industry?

Not all global banks are performing above average。Nearly half of banks make less than their cost of equity, and the situation varies by region。It's worth noting that banks in emerging markets are doing quite well。However, the impact of COVID-19 and the Ukraine crisis has not yet fully dissipated, but it is not the only disruptive force or shock the industry will have to withstand and cope with in 2023.

The overarching issue going forward is that as the economy weakens and gradually slows, the performance gap between existing financial service providers will be magnified.。As interest rates rise, banks will benefit from higher profit margins, but these gains may not last long。According to McKinsey, banks are facing a "prolonged slowdown in growth," which will lead to what its analysts call a "huge divergence."

For investors, that means there are winners and losers, an area where choice is more important than ever。The disagreement will be regional and will depend on how each institution operates and how it receives funding.。For example, bank stocks will continue to trade at a significant discount compared to fintech companies, but this has been the case due to slow growth and low profit expectations

There will always be strong performers, though, but they are now more about size, geography, specialization, and customer segmentation and demographics。For example, many banks in Europe remain unprofitable。Big global banks would be better off, and transaction-focused infrastructure companies are always a good choice when the economy lags and shows signs of recovery。When the economy starts to improve, payment companies are usually the first beneficiaries

The Best Financial Stocks to Buy

JPMorgan Chase & Co. (NYSE: JPM)

JPMorgan Chase is a global financial services provider that has been popular with investors。The banking giant is focused on both the future and the present, as investment, especially in technology, is necessary for long-term profitability.。The company's information officer announced that after hiring 5,000 software developers and data scientists, the company is currently hiring 2,000 engineers.

Bank of America (MYSE: BAC)

Another winning general for investors in the industry is Bank of America (BofA).。The global giant, like JPMorgan, has long turned things around in tough times。In banking, quality is really the most important。The bank recently increased its investment in minority institutions by $100 million.

If JPMorgan has a peer, it's Bank of America.。It has also outperformed JPMorgan in many ways since the financial crisis restructured the entire banking sector.

Visa Corporation (NYSE: V)

Of the last three companies in the payment processing business, Visa tops the list。Visa is not a bank, but it is responsible for the network that connects banking institutions around the world, all the way to point of sale or ATMs.。Visa is a technology company whose revenue comes from payment transaction traffic, which increases even in hard times.

Mastercard Corporation (NYSE: MA)

Although Mastercard is almost a replica of Visa, it is only half the size of Visa。The technology company is known for its low cost margins, especially in marketing。In addition, MasterCard has benefited from a recovery in cross-border travel and payment processors often seen as safe havens in times of economic instability.

Block Company (NYSE: SQ)

Block Inc., formerly Square, is an American financial services company whose founder and CEO is Twitter personality Jack Dorsey.。The company is much smaller than Visa or Mastercard, but it provides connectivity and technology for small businesses to accept card payments.

What you need to know before investing in financial stocks

There are risks associated with investing in financial stocks or any type of stock。The stock market can be very volatile, and prices can fluctuate significantly depending on the company you choose and the market you are in

As mentioned at the beginning of this article, most people think of banks when they mention financial stocks, and it is important to note that bank stocks are subject to interest rate risk

Banks will profit from interest on loans and mortgages, so another question to consider when analyzing bank stocks is who the bank lends the money to

Finally, if you are investing in an investment company, be sure to consider its investment risk when analyzing stocks

How to Start Online Financial Stock Trading？

Study different financial companies

First, research the company you want to buy。What are the attendant risks？Do you think its value is undervalued or overvalued？Do you think its share price will rise？

Find a broker

The next step is to find a broker, there are hundreds of brokers for you to choose from, but you need to pick the one that suits you best

Open an account and inject capital

The next step is to open an account and inject capital, the broker should have relevant instructions, if not, you can check our website

Select and buy shares

Please log on to the broker platform, select and purchase company shares

Conclusion

Always keep in mind that investing in the stock market is risky and prices can fluctuate。When investing, be sure to look at the big picture and recommend long-term investments