The Worst Investments of 2017

What are some of the worst-performing investments in 2017? As U.S. growth accelerates, investors should avoid low quality companies that are loading up on debt and almost universally hated by the investing community.

High debt and high short interest stocks have been among the worst performing "style factors" this year. It makes sense. After U.S growth bottomed out at 1.2% in 2Q16 and rebounded most recently to 2.1% in 2Q17, you would expect the lowest quality companies to lag high quality.

Here's Hedgeye CEO Keith McCullough in today's Early Look:

"By “low-quality”, I mean HIGH DEBT + HIGH SHORT INTEREST as Style Factors in US Equities: High Debt (EV/EBITDA) was down -1.9% last week to +5.1% YTD High Short Interest was down -2.5%  last week to -3.1% YTD *Mean performance of Top Quartile vs. Bottom Quartile of SP500 Companies Both of those Style Factors have been a terrible place to be exposed during the Real US #GrowthAccelerating phase of 2017 relative to something like Tech (XLK), which was only -0.9% last week to +18.1% YTD."

That's what we expect will continue to be priced into markets this year. At Hedgeye, we have some of the highest estimates for U.S. economic growth on Wall Street. We're sticking with our call to buy U.S. #GrowthAccelerating investments like Tech stocks.