The rising inflation, potentially larger rate hikes, inverted yield curves as signs of impending recession have spooked immense fear in many investors. In times of such volatility, it is of paramount importance that investors are vested in fundamentally strong companies with pricing power. For example, $Coca-Cola(KO)$,$NVIDIA Corp(NVDA)$, $ASML Holding NV(ASML)$, Procter & Gamble, Microsoft

The rising costs, exacerbated by the supply chain issues, increasing wages, geopolitical conflict, will put intense pressure on companies' ability to maintain the profitability. This is a major concern as the valuation of most US stocks are still relatively high compared to history P/E. 

Identifying companies that have high pricing power therefore becomes imperative as these companies possess the ability to pass on the increased cost to customers. The pricing powermay be due to a myriad of reasons, for example:

1. inelastic/relatively price insensitive demand - products/services being an essential part of daily lifes (e.g necessities) or company'scritical operations (e.g cloud or enterprise subscription)

2. monopolistic/oligopolistic nature of the industry where there is only one dominant leader or minimal competition. If the associated products/services are essential, these companies will be able to pass on the increased cost withlittle to no impact to their bottom line. 

Are you ready for the volatility in 2022? Happyto hear your thoughts and strategy for this year! [Grin]