This analysis is from John Derrick, U.S. Global Investors Director of Research. The market has rallied dramatically since the March 9 low, with the biggest beneficiary of this rally being low-quality companies. This intuitively makes sense, given that companies with the most troubled outlooks are the ones most likely to have a strong recovery when the dire outcomes predicted at the bottom of the crisis failed to transpire. Quality may have different meanings to different investors, but in a recent research piece, Citigroup ranked performance based on multiple definitions of quality. Samp;P earnings quality ranking, debt-to-capitalization ratio and return on equity were used as proxies for quality. The research universe was the small-cap Russell 2000 Index, but I believe broader market conclusions can be drawn as well. Based on Samp;P earnings quality rankings, companies with C or D (the two lowest categories) ratings returned about 55 percent over the past six months, while the ...

This post is a guest contribution by John Derrick, Director of Research at US Global Investors.

We believe global growth is the most powerful investment theme now and for the foreseeable future. You can see this playing out as countries like China, India and Brazil grow in economic stature. As we saw in Pittsburgh last week, the G-7 is being supplanted by the more inclusive G-20 when it comes to global economic decision-making.

Emerging market stocks were hit especially hard during the financial crisis but have been among the best performers during the rebound. We are currently in the midst of a synchronized global recovery, and with aggressive government stimulus, strong balance sheets and an ever-growing share of global GDP, emerging markets are likely to outperform the developed markets due to strong domestic consumption and forward-looking infrastructure investments.

The chart below from Goldman Sachs on consumer spending

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This commentary is from John Derrick, U.S. Global Investorsrsquo; director of research. If you believe now is a good time to invest in U.S. stocks, emerging markets may offer even more opportunity. We believe global growth is the most powerful investment theme now and for the foreseeable future. You can see this playing out as countries like China, India and Brazil grow in economic stature. As we saw in Pittsburgh last week, the G-7 is being supplanted by the more inclusive G-20 when it comes to global economic decision-making. Emerging market stocks were hit especially hard during the financial crisis but have been among the best performers during the rebound. We are currently in the midst of a synchronized global recovery, and with aggressive government stimulus, strong balance sheets and an ever-growing share of global GDP, emerging markets are likely to outperform the developed markets due to strong domestic consumption and forward-looking infrastructure ...

This commentary is from John Derrick, U.S. Global Investorsrsquo; director of research. If you believe now is a good time to invest in U.S. stocks, emerging markets may offer even more opportunity. We believe global growth is the most powerful investment theme now and for the foreseeable future. You can see this playing out as countries like China, India and Brazil grow in economic stature. As we saw in Pittsburgh last week, the G-7 is being supplanted by the more inclusive G-20 when it comes to global economic decision-making. Emerging market stocks were hit especially hard during the financial crisis but have been among the best performers during the rebound. We are currently in the midst of a synchronized global recovery, and with aggressive government stimulus, strong balance sheets and an ever-growing share of global GDP, emerging markets are likely to outperform the developed markets due to strong domestic consumption and forward-looking infrastructure ...

John Derrick, our director of research, put this together for last weekrsquo;s Investor Alert. After nearly doubling in the first seven months of the year, the domestic Chinese stock market fell more than 20 percent in August. China had led the world out of recession, its aggressive stimulus and other government programs helping to stabilize its domestic economy. With the August stock market drop, the conventional thinking was that the market had gotten ahead of itself and the Chinese economy was setting itself up for a significant slowdown. nbsp; Such pessimism overlooks many fundamental positives in China, particularly on the consumer sentiment side so important for sustaining a recovery. In Augustrsquo;s monthly survey by researchers at CLSA, for example, 91 percent of respondents said they believe business conditions in China will be the same or better in six monthsrsquo; time. Compare that to 42 percent of respondents in December 2008. Itrsquo;s worth pointing out that ...

John Derrick, our director of research, put this together for last weekrsquo;s Investor Alert. After nearly doubling in the first seven months of the year, the domestic Chinese stock market fell more than 20 percent in August. China had led the world out of recession, its aggressive stimulus and other government programs helping to stabilize its domestic economy. With the August stock market drop, the conventional thinking was that the market had gotten ahead of itself and the Chinese economy was setting itself up for a significant slowdown. nbsp; Such pessimism overlooks many fundamental positives in China, particularly on the consumer sentiment side so important for sustaining a recovery. In Augustrsquo;s monthly survey by researchers at CLSA, for example, 91 percent of respondents said they believe business conditions in China will be the same or better in six monthsrsquo; time. Compare that to 42 percent of respondents in December 2008. Itrsquo;s worth pointing out that ...