Stocks had a roller coaster ride in September. Last Monday, the S&P 500 and the Nasdaq suffered their worst one-day declines since May on concerns surrounding the Chinese property developer Evergrande. They rebounded strongly later in the week particularly after the Fed signaled it may start to taper its bond purchases in November.

We may continue to encounter turbulence in the coming weeks on rising concerns about slowing economic growth and the Delta variant.  Despite a record rally, stocks still look attractive compared to bonds thanks mainly to ultra-accommodative monetary policy. 

While some investors are concerned about stretched valuations, the rally this year has been driven primarily by excellent earnings growth and most valuation metrics remain close to their levels at the beginning of the year.

As growth is expected to slow down in 2022, investors have started favoring stocks with more quality balance sheets and less volatile earnings, over the past few weeks. Quality stocks have historically outperformed in mid-cycle economies when growth starts slowing.

The iShares MSCI USA Quality Factor ETF (QUAL Quick QuoteQUAL - Free Report) , Invesco S&P 500 Quality ETF (SPHQ Quick QuoteSPHQ - Free Report) and JPMorgan U.S. Quality Factor ETF (JQUA Quick QuoteJQUA - Free Report) invest in stocks exhibiting positive fundamentals.

Apple (AAPL Quick QuoteAAPL - Free Report) , Microsoft (MSFT Quick QuoteMSFT - Free Report) , NVIDIA (NVDA Quick QuoteNVDA - Free Report) JP Morgan (JPM Quick QuoteJPM - Free Report) and Visa (V Quick QuoteV - Free Report) are among the top holdings in these ETFs.  To learn more, please watch the short video above.