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The Compound and Friends

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Quality Skews as the Cycle Ages

During market moves, there is a tendency for low-quality stocks to experience volatility spikes and become big gainers. As the cycle progresses, the quality of stocks can skew upwards. Choosing the S&P 600 over the Russell 2000 is considered a better construction due to the latter still having a lot of low-quality stocks. Opting for the active route is also preferred.

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