Investing in Stocks? Balance Sheets Are Everything

Most successful investors agree with the notion that in crises, cash is king. That's especially true in a crisis that leads to entire industries shutting down for an uncertain period of time, depriving corporations of all of their revenue in some cases. Having a strong balance sheet can be the difference between weathering the storm and going out of business.

That's true even considering the massive interventions by global governments and central banks. It's no surprise that high-yield corporate bonds are struggling. The companies they finance had exhibited risk to their interest-paying ability long before this existential crisis hit. Should the COVID-19 crisis last longer than the optimistic assumptions, a lot of companies simply won't make it.

In this environment, it's natural to look for those companies with the strongest balance sheets. While stable financials alone don't guarantee