The beauty of a ‘quality’ company is that it is, in theory, in charge of its own destiny. A sustainable competitive advantage and strong growth potential should mean that, over the course of time, a business is well insulated from underlying economic pressures.
The idea is that shares in these companies are buy-and-hold, set-and-forget positions. That feels particularly enticing at a time when the range of possible outcomes for the US (and global) economy looks unusually wide.
Donald Trump’s imminent return as US president throws up a number of new variables. Take the example of tariffs: the snap reaction to the presidential election result suggested investors believe inflation will indeed increase, partly as a result of policies like these. There is a counter-argument that says restrictions on trade, by reducing consumption and investment, would prove deflationary. The answers to questions like this will take time to materialise.