These 2 Stocks Could Be a Fortress for Your Portfolio
It's clear from the volatile first few weeks of 2022 that investors are concerned about inflationary pressures in the economy and the Federal Reserve's plans to raise interest rates three times this year to combat it. This matters because rising rates signal that the Fed's easy monetary policies are winding down. It also means companies with high debt levels will face higher interest rates in the future when they refinance or issue more debt. As a result, the stocks that get hit first are those with high valuations that may not turn a profit for a while.
Paying attention to a company's balance sheet lets you know if a company is on a solid foundation -- or not -- and can tell you how resilient it can be in different market environments. For this reason, you want to seek out companies with strong balance sheets. Two companies with fortress balance sheets that can fortify your portfolio are Berkshire Hathaway (NYSE: BRK.A) and Visa (NYSE: V).
Berkshire Hathaway sits atop the list when it comes to fortress balance sheets. Warren Buffett has an established history of outperformance as Berkshire's chief executive, and a big reason is that the company manages its balance sheet so well.
Source Fool.com
