As the stock market enters what has historically been its weakest month of the year, investors are expected to shift their focus toward quality growth stocks to dodge short-term market fluctuations and reap maximum rewards. Therefore, we believe stocks with strong fundamentals and solid growth attributes—Gates Industrial Corporation (NYSE:GTES) and Oceaneering International (NYSE:OII)—could be wise bets now. Read on.The S&P 500 has risen more than 20% this year—nearly double its long-term historical average annual gain. However, investors have traditionally made shifts in their holdings ahead of the third-quarter earnings season as the stock market enters what has historically been its weakest month of the year. Furthermore, according to payroll services firm ADP, U.S. companies added fewer jobs than projected in August. Private payrolls increased by just 374,000 in August, considerably less than the 600,000 the Dow Jones expectation.
This, along with the Fed’s statement on its coming plans and any change in the momentum of economic recovery, is expected to lead to increased market volatility in the coming weeks. However, we think growth stocks could be ideal for investors looking to dodge market fluctuations because they are well-positioned to outperform the overall market in the long run. Investors’ interest in growth stocks is evident in the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 14.7% returns over the past three months.
Given this backdrop, fundamentally strong growth stocks Gates Industrial Corporation plc (GTES) and Oceaneering International Inc. (OII) could be great additions to one’s portfolio now.