Although the S&P500 has enjoyed a sizeable 15% rally this year, this has come on the back of gains by low-quality stocks - characterised by low price-to-earnings ratios, zero dividend yields, high short interest and lowest analyst ratings. Jim Paulsen, the chief market strategist at Wells Capital Management, said the high-beta qualities of these low-quality performers are exactly what you would expect of a market regaining rhythm after years of no confidence. Research by Bespoke Investment Group found that the 50 biggest stocks gained 13.3% while the 50 smallest stocks surged 21.9%. (VIEW LINK)


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