The stock market has been quite turbulent lately upon growing concerns over 40-year high inflation, the possibility of aggressive interest rate hikes, increasing sanctions in Russia, rising COVID-19 cases, and deepening supply chain disruptions. As the effects of these factors are not expected to subside soon, buying the dip in quality stocks could be a wise decision given a cautiously upbeat U.S. economic outlook.
Stocks possessing strong profitability and delivering steady revenue and earnings growth are typically considered high-quality stocks. And their fundamental strength helps them dodge market uncertainties relatively well. Investors’ interest in high-quality stocks is evident in the Invesco S&P 500 Quality ETF’s (SPHQ) 3.1% returns over the past month.
