Strategists at BMO Capital Markets are also encouraged by the market's rally. In fact, the firm now believes new all-time highs for the S&P 500 are within striking distance if all goes well.
The two-pronged strategy, which involves buying reasonably priced stocks with growth that would benefit in a rally, as well as those that offer downside protection through dividend growth and high yields, has historically produced strong returns relative to the broader market, according to BMO. He added:"Therefore, we view the YTD underperformance of our barbell approach as a buying opportunity and recommend that investors increase exposure to these areas since we believe recent outperformance trends are likely to persist given what we view as attractive and underappreciated underlying fundamental trends for the strategy."