Focus on quality stocks in growing industries

Article Excerpt

High-quality companies generally perform well during good times and decline less during market upheavals—this is a combination that keep benefiting top stocks in 2022. TSI Network has developed a 10-point checklist of factors that define high-quality, attractive companies. These include a history of generating profits, paying regular dividends, manageable debt, management integrity, industry prominence, and the freedom to serve all shareholders. Global industry participants, including MSCI and Standard & Poor’s, have also done extensive work on the definition of quality companies. While there are slight differences between their definitions, they all tend to include high and stable profits, as well as strong balance sheets. Better returns, lower risk Over time, high-quality companies perform better than the broad market and hold less risk for investors. The graph following indicates that the MSCI World Quality Index delivered a total return of 12.2% per year since 1994, comfortably beating the broad MSCI World index. The stock prices of quality companies are typically less volatile than the broad market…

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