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There are investment terms used all the time that actually have no meaning. For instance, we learned during the financial crisis from stocks like AIG, a company that previously appeared financially bulletproof, that the term 'blue chip' was irrelevant.

The word 'quality,' the way it's normally used, is another example. A financial profession whose job it is to sell stocks will call something a 'high-quality company' but all the investor gets from it is some vague notion of 'good.' No more explication of what 'quality' means is ever given.

Standard and Poor's has, however, derived specific characteristics that make a stock 'high quality.' They define it as "consistency of earnings and dividend growth over the prior 10 years." Note that, while higher growth companies are preferred, consistency and stability are more important. Quality stocks, according to S&P, are not those with the fastest growing profits, but companies that can grind out earnings growth no matter what the economic or market environment.

The S&P definition of quality is not popular in Canada because no resource stock fits the criteria – the volatility in commodity prices means that profits don't remain stable for long. It doesn't mean all resource stocks are bad investments – there's been a huge rally since January in a lot of them – just that 'high-quality mining stock' is likely a misnomer.

The Canadian market does have a number of actual quality companies. Bank stocks usually qualify as do the telecommunications companies and staples retailers like Metro Inc. But outside of these sectors, investors should ask questions every time they're being sold a 'high-quality' stock.

Three big numbers to note

3.6% The gain of the S&P 500 in the month of July.

7%    The gain of the Nasdaq 100 index in July.

36% The current odds for a U.S. Federal Reserve rate hike by December.

Stocks to ponder

George Weston Ltd.  The food processing and distribution company, which operates two business segments, Weston Foods and Loblaw, recently posted financial results that met expectations, writes Jennifer Dowty, and gave a positive outlook for the next six months with the addition of new plant capacity.

Johnson & Johnson. John Heinzl says shares in the health-care dividend giant have risen this year due to its strong results and a surging stock market. With the expectation that its dividend will continue to grow, this is a stock worth having in your portfolio.

Genworth MI Canada Inc. Often a stock moves higher after reporting its financial results, says Jennifer Dowty, and this mortgage insurer has a history of doing so. Genworth reports results Aug. 2, and has had positive earnings revisions, is in a strong industry, and has solid fundamentals.

Bed, Bath & Beyond Inc. The retailer, along with Williams-Sonoma Inc. and Restoration Hardware, are three U.S. bricks-and-mortar stocks that get a top rating from equities research firm Morningstar, writes David Milstead. Morningstar's recommendation is contrarian as most analysts have "hold" or "sell" ratings on the shares. The stocks are in the bargain bin right now, but could rise as the economy in the U.S. strengthens.

The Rundown

Robo-advisers aren't for home runs

Robo-advisers are for people who want a sound, smart investing solution, not home runs, says Rob Carrick. So, since they're still so young, the key is to look at their methodology and how they construct portfolios, not returns.

ETFs reach $100-billion mark

Canada's exchange-traded fund industry is on pace for another record year, with more than $10.6-billion in inflows so far in 2016, says BMO Global Asset Management's semi-annual ETF Outlook Report, released Thursday. The report also says assets under management have surpassed the $100-billion mark, which is double what the industry had under management four years ago, writes Globe reporter Karen K. Ho.

Bank shares soar, but beware

Canadian banks' consistent profit growth and regular dividend increases have created a problem for investors: Bank stocks are now expensive after an impressive rebound from the sell-off earlier this year, writes banking reporter David Berman.

Why you need to look at India

India is one of the most promising of all emerging markets, writes Globe Investor contributor Hugh Smith. It's one of the most populous countries, it has a young population that is entrepreneurial and sees education as important. The potential growth for the country, whose economy has been relatively stable,  is great, he says, and that makes it a good place to invest.

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What's up in the days ahead

Scott Barlow spells out his top three investing influences, Brenda Bouw writes about why analysts like Automotive Properties REIT, Larry Berman talks about the sad state of Europe's financial and economic situation and talks about an ETF that readers should consider, and John Reese gives three value stock picks.

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Gillian Livingston

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