Quality Stocks To Bolster Your Portfolio: Buy Now Before It’s Too Late!

Still, such deceleration hopes are just that: hopes. After all, the consumer price index climbed in September and is up more than 8% year on year, and the federal-funds futures market predicts a peak rate in the 5% range.

The 10-year Treasury yield is nearing a multiyear high, and rate rises are already affecting earnings. It is unclear if they will produce a recession.

So, is the current advance the start of a new bull market or just another bear-market rally? If you can't decide, examine excellent stocks. Of fact, there are several meanings of quality. It might refer to enterprises with consistent profitability, large profit margins, or excellent credit ratings, which will keep borrowing costs relatively low even when interest rates rise. They are the firms that can best weather adverse economic circumstances, whichever you define it.

"Volatility in both equities and rate markets is expected to persist, supporting a quality orientation in the intermediate term," says Citigroup strategist Scott Chronert.

Chronert looked at the five most popular exchange-traded funds focused on large-cap quality stocks and chose the ones with reasonably substantial weightings in those ETFs to locate quality stocks. Target (TGT), Exxon Mobil (XOM), Johnson & Johnson (JNJ), and Mastercard (MA) are among the companies on the list.

Coca-Cola (KO), a Trader selection at the beginning of the year, appears particularly appealing. The stock has dropped 5.4% in 2022, compared to the S&P 500's 21% loss. It's lucrative — analysts predict an operating margin of 29% in 2023, up from 17% for the S&P 500 as a whole — and it can probably keep those margins as it raises prices to cover increased expenses. As a consumer staple, its profits are highly stable, and the stock has a beta of 0.61, with anything less than one being less volatile than the S&P 500.

At the very least, it's the type of stock that won't do too much harm to a portfolio if things go wrong, and it may help a portfolio if things go well.