The last few years have been categorized by one thing, and that’s growth.
As growth returned, investors plowed headfirst into equities with, perhaps, reckless abandon. By many historical measures, valuations have become stretched. This has led to the return of market volatility in a major way. With stocks now ebbing and flowing and producing some major swings, investors are facing a quandary. How do you still get great returns while reducing some of the potential volatility?
The answer? Get back to basics.
In our haste to bet on the growing U.S. economy and finding gains, many investors have forgotten to focus on fundamentals when selecting stocks. But in highly volatile markets, cash flows, sales growth and dividends matter. It’s time to, once again, start focusing on quality.