It’s September. Football kicks off, everybody’s back in school, and members of the financial media warn that September hasn’t historically been a good month for stocks.
As longtime readers know, we at Morningstar don’t predict market movements. Perhaps September will be rough, perhaps not. Either way, we recommend the same approach to investing in stocks this month as we do every other month of the year: Focus on undervalued companies with economic moats. Why is this our stock-investing mantra? For starters, undervalued stocks offer some margin of safety, which could come in handy during a market hiccup. Moaty companies, meanwhile, possess advantages that should allow them to be competitive over time--and their higher-quality bias can provide some downside protection, too.
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Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.