Value, Low-Quality U.S. Stocks Beat S&P 500 for a Change: Chart

TIAA's Optimistic Outlook for Stocks, U.S. Economy

Value and low-quality stocks deserve to be bought as a “correlation trade” after rebounding this year, according to Thomas J. Lee, managing partner at Fundstrat Global Advisors LLC. The ratio between the Standard & Poor’s 500 Value Index, a gauge of shares that are cheap relative to earnings, sales and asset values, and the S&P 500 advanced 2 percent through yesterday from a 15-year low on Jan. 25. A similar ratio for the S&P 500 Low Quality Rankings Index, which reflects earnings- and dividend-based company ratings by S&P, climbed 6.5 percent after reaching a 3 1/2-year low on Feb. 11.

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