In this article, we will be taking a look at the Conservative Stock Portfolio: 11 Best Stocks to Buy Now.
The equity market outlook has always been positive whenever the US Federal Reserve cuts rates in an accelerating economy. That has been the case as stocks have raced to record highs, defying seasonal weakness in September amid mounting concerns about macroeconomic indicators. Likewise, strategists at Bank of America believe the run in big tech stocks has further room to go despite two years of substantial gains.
Nevertheless, Tony Pasquariello, Head of hedge fund coverage at Goldman Sachs Group Inc., insists it is high time investors remembered the importance of being “responsibly bullish.” The sentiments emerge against the backdrop of premium valuations, with equity markets trading above historical norms.
“So, own what you want to own,” Pasquariello wrote. The analyst believes investors should start using the options market to manage risks and refrain from chasing the market.
Nomura Securities International Inc.’s cross-asset strategist, Charlie McElligott, shares similar sentiments, reiterating that investors should focus on hedging their portfolios as more people chase the stock market rally. “Even though it hurts, you cannot take your hedges off now, no matter how much they’re dragging performance,” the strategist said,
US Federal Reserve Governor Jerome Powell, giving no signs that he will support a cut at the central bank in October, is already presenting numerous risks in a market trading at record highs.
“Powell’s warning against cutting too aggressively highlights the growing split inside the Fed,” said Natalie Gallagher, principal economist at the Board. “That divide itself has become a market catalyst, adding uncertainty around the pace of the cutting cycle.”
Kevin Gordon, senior investment strategist at Charles Schwab, has already warned that investors face a risk of market breadth narrowing and performance becoming reliant on a few dominant stocks. Amidst the emerging concerns, focus could slowly shift to conservative plays that hold steady regardless of uncertainties in the overall market.
Conservative investments typically involve defensive stocks, which tend to perform well regardless of economic conditions or changes in monetary policy. These stocks offer stability and resilience during market fluctuations. With that in mind, let’s look at the best stocks to buy now for a conservative stock portfolio.
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Our Methodology
To identify the conservative stock portfolio: best stocks to buy now, we relied on Insider Monkey’s database and stock screeners to pick conservative (safe, reliable, and defensive) stocks. We settled on stocks that are likely to outperform regardless of economic conditions and are popular among elite hedge funds in Q2 2025. Finally, we ranked the stocks in ascending order based on the number of hedge funds that hold stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is straightforward: our research has demonstrated that we can outperform the market by replicating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Conservative Stock Portfolio: Best Stocks to Buy Now
11. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 64
3M Company (NYSE:MMM) is one of the best conservative stocks to buy now. On September 11, at Morgan Stanley’s 13th Annual Laguna Conference, CEO Bill Brown reiterated plans to accelerate growth and expand margins through strategic initiatives.
The company aims to achieve a 25% margin expansion by 2027, with a focus on innovation and operational efficiency. The margin expansion is expected to follow as the company plans to strengthen its pipeline with the launch of 1,000 new products over the next three years.
“What we laid out at the investor day is that we would generate $1 billion of growth above the macro over the next three years. We said, look, half of that is going to come out of commercial excellence, and half is going to come out of new product introductions. We also said that the front end of it is going to be mostly commercial excellence, and that NPI or the growth from innovation will be the accelerant beyond it in 2026 and 2027,” CEO Brown said.
In the first half of the year, the 3M Company achieved 1.5% organic growth and is on track to achieve 2.5% growth in the second half of the year.
3M Company (NYSE:MMM) is a global science-based technology company that invents and applies its diverse technologies to create innovative products for businesses and consumers. It offers products ranging from Post-it® Notes and Scotch® Tape to advanced materials, medical supplies, and safety equipment across various industries, including healthcare, automotive, consumer goods, and electronics.
10. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 67
Bristol-Myers Squibb Company (NYSE:BMY) is one of the best conservative stocks to buy now. On September 23, at the Bernstein Insights: Healthcare Leaders and Disruptors, the company emphasized its leadership in cell therapy.
The remarks come on the company treating 13,000 patients with cell therapy while leveraging extensive clinical data. Likewise, it is currently working on Orva-cel and Breyanzi, which it believes pose significant prospects in targeting autoimmune and neuroinflammatory diseases.
“As we sit four years later, after treating 13,000 patients, we sit in a unique position at Bristol Myers Squibb where we have more manufactured clinical and translational data than almost anyone else in this space. It has afforded us the opportunity not only to grow our inline assets, but it’s helped us accelerate our pipeline,” said Lynelle, Head of the Cell Therapy business, Bristol Myers Squibb.
Approved to treat certain adult lymphomas, Breyanzi is the company’s lead cell-based gene therapy. With only 20% of eligible patents currently receiving CAR T therapy, the company is staring at tremendous opportunities.
Bristol-Myers Squibb Company (NYSE:BMY) is a global biopharmaceutical company that discovers, develops, manufactures, and sells innovative medicines to treat serious diseases, with a focus on areas like oncology, immunology, hematology, and cardiovascular disease.
9. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 68
PepsiCo, Inc. (NASDAQ:PEP) is one of the best conservative stocks to buy now. On September 18, the company confirmed its participation in Supporting Trusted Engagement and Partnership (STEP) up for Agriculture (STEP up for Ag).
The initiative, which brings together leading retail and global food and beverage companies, seeks to scale regenerative agriculture through locally tailored support systems. The initiative aims to equip farmer-facing organizations with the tools, training, and funding needed to accelerate the adoption of sustainable practices.
The initiative aligns with PepsiCo’s goal to transition 10 million acres by 2030 by strengthening farmer support. The expansion has already begun in Europe, marking a global push towards regenerative agriculture.
PepsiCo, Inc. (NASDAQ:PEP) engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips, among others.
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