Volatility Playbook: 3 stock picks for conservative investors

Consider These 3 Low Volatility Names in a Mixed Market

How investors handle market volatility is ultimately what will define their long-term success. We have recently had some of the best years in stock market history, which is why many are struggling to adjust to the challenging market conditions that have occurred so far in 2022.

While it’s hard to say how long the volatility will continue, offering a solid playbook for handling big downside moves and taking advantage of stocks that tend to perform well in a “risk-free” band is a essential strategy to work at.

If you’re interested in a good starting point, focusing on what tends to hold up well during market downturns is perhaps one of the best ways to deal with volatility. These stocks are perfect for conservative investors and, over the long term, tend to provide consistent gains for shareholders, which means adding stocks even when they are falling can lead to a profitable long-term investment.

We’ve put together a list of 3 stock picks for conservative investors below to help you get an idea of ​​the types of names to explore in such a tough market.

1. PepsiCo

Blue-chip consumer staples like PepsiCo (NASDAQ:) tend to hold up well during bouts of volatility, and that’s definitely one of the positives of a weak market right now.

As one of the largest food and beverage companies in the world, PepsiCo’s diverse product portfolio has helped it become a truly global powerhouse. The company is expected to produce organic products as the economy continues to reopen, while a focus on expanding its healthy product offerings could be another strong driver of near-term growth.

Consumer preferences are shifting to favor these types of health-conscious snack foods, and products like Sabra Hummus, Baked Lays and Bubly sparkling water signal to investors that company management understands the growth potential there.

There’s also a lot to like about PepsiCo’s defensive properties since the company will see demand for its products in nearly every economy. Finally, a beta value of 0.66, a history of dividend growth and a stock buyback program make it an ideal choice for conservative investors.

2. Berkshire Hathaway

Nothing says conservative like insurance companies, and Berkshire Hathaway (NYSE:) is perhaps one of the best stocks to consider owning for exposure to this industry. It’s also a great stock to own since you have legendary investor Warren Buffett at the helm, which should definitely give investors extra confidence that their capital is in safe hands.

In addition to insurance, Berkshire Hathaway is a holding company that also offers exposure to railroads, financial services, energy, retail, manufacturing, etc., which is an argument solid sales to consider.

What’s also nice here is that the company generates a ton of cash every quarter through its business model, which in turn gets reinvested in new acquisitions over the years.

Conservative investors should look to companies that have a lot and from Berkshire balance sheet is arguably one of the best in the market thanks to over $149 billion in cash and short-term investments as of September 30, 2021. The stock is currently reaching all-time highs in a challenging market environment, this which tells us that investors are interested in adding stocks amid the volatility.


Finally, we have a low-volatility stock that could last a solid year after an interest-free 2021. Walmart (NYSE:) is the world’s largest retailer, operating a chain of more than 11,000 discount department stores, wholesale clubs, supermarkets and supercenters. .

We know consumers are going to focus on price-conscious shopping this year given all the reports of rising inflation, which bodes well for Walmart.

There’s also a lot to like about the company’s e-commerce offering, Walmart+, which should see the company win even more customers from competitors in the years to come.

Walmart also has a long history of increasing its dividend payouts, which tells us it’s a well-run company with enough financial stability to continue rewarding shareholders over the years. The company saw third-quarter comparable sales increase 9.2% year-over-year and is poised for a strong quarter thanks to the holiday shopping season.

With a beta value of 0.52 and an assortment of goods that consumers will always be interested in buying, Walmart is certainly a top pick for conservative investors.

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