Volatility Playbook: 3 Stock Picks for Conservative Investors

How investors deal with volatility in markets is ultimately what will define their long-term success. We’ve recently been treated to some of the best years in the history of the stock market, which is why many are having a tough time adjusting to the difficult market conditions occurring thus far in 2022. While it’s hard to tell just how long the volatility will continue, coming up with a strong playbook for handling big moves to the downside and taking advantage of stocks that tend to perform well in a “risk-off” tape is an essential strategy to work on.

If you’re interested in a good place to start, focusing on low-beta names that tend 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 run tend to provide consistent gains to shareholders, which means adding shares even when they are pulling back 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 some insight into the types of names to explore adding in such a challenging market.


Blue-chip consumer staples companies like PepsiCo tend to hold up well during bouts of volatility, and it’s certainly one of the bright spots in a weak market at this time. As one of the largest food and beverage companies in the world, PepsiCo’s diverse product portfolio has helped it become a true global powerhouse. The company is expected to deliver organic sales growth as the economy continues to reopen, while a focus on expanding its healthy product offerings could be another strong growth driver in the near term.

Consumer preferences are changing to favor these types of health-conscious snack foods, and PepsiCo’s products like Sabra Hummus, Baked Lays, and Bubly sparkling water tell investors that the company’s 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 almost any economy. Finally, a 0.66 beta value, a history of dividend growth, and a share repurchase program make this an ideal pick for conservative investors to consider.

Berkshire Hathaway Inc (NYSE: BRK.B)

Nothing says conservative like insurance companies, and Berkshire Hathaway is perhaps one of the best stocks to consider owning for exposure to that industry. It’s also a nice stock to own since you have legendary investor Warren Buffett at the helm, which should certainly give investors some added confidence that their capital is in good hands. In addition to insurance, Berkshire Hathaway is a holding company that also offers exposure to railroads, financial services, energy, retailing, manufacturing, and more, which is a strong selling point to consider.

What’s also nice here is that the company generates a ton of cash each quarter thanks to its business model, which in turn is reinvested in new acquisitions over the years. Conservative investors should be looking at companies with plenty of financial strength, and Berkshire’s 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 breaking out to all-time highs in a difficult market environment, which tells us that investors are interested in adding shares amidst volatility.

Walmart Inc (NYSE: WMT)

Finally, we have a low-volatility stock that could be in for a strong year after an uninspiring 2021. Walmart is the world’s largest retailer, operating a chain of over 11,000 discount department stores, wholesale clubs, supermarkets, and supercenters.

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