Investors are bucking the general trend of gloominess pervading the national audience, sending stocks to their highest level in four years last year, and if history is any guide, prices could soar even higher by the end of the year.
Even as election season grinds on and a majority of voters say they believe the country is moving in the wrong direction, investors are flocking to riskier assets - the ones that tend to come back first in a recovery. The edgier parts of the U.S. stock market, including small cap stocks and stocks with higher beta, have rallied since the market bottomed in early June, soundly beating the broader market. Historically, this kind of confidence has ultimately lifted the entire market, pointing to gains by the end of the year, according to Sam Stovall, chief equity strategist at S&P Capital IQ.
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