Everyone loves high quality! How could they not? The word “quality” is synonymous with “good,” and in almost all fields of human endeavor, high quality is viewed more favorably than low quality. When you go looking for a new car, do you ask for a low-quality one?
But quality investments are particularly important during volatile and unpredictable markets. The reason is simple: higher-quality companies have more confident management, which may have a greater ability to weather market downturns. These companies typically provide increased stability and have the potential to outperform over time as they tend to have higher profitability, stronger balance sheets, and consistent earnings growth.
But don’t take my word for it. There is a lot of empirical evidence and many academic studies emphasizing the benefits of quality investments. Here are a few of my favorites…