Finally, the stock
market and
economy are doing noticeably better. Perhaps the most welcome sign is unemployment, which has gradually worked its way down to 8.5% from a
recession high of 10.1% in October 2009. The S&P 500 has risen nearly 9% in the past three months and investors have been forecasting progressively less market volatility, as shown by a 35% decline in the
Chicago Board Options Exchange (CBOE) Volatility
Index during the past three months.
Not all the stocks that have been participating in the recent rally deserve to, however, because the companies they represent simply don't have a very bright future.
Even though these stocks have been going up with the overall market, plenty of them could drag a portfolio down in the long-run. I wouldn't recommend these stocks to anybody because they're likely to seriously underperform and lose you money, even if there's an extended bull market.
Office supply retailer Office Depot Inc. (NYSE: ODP) is such a stock.
Office Depot has already been a poor performer for many years, losing shareholders 18% annually for the past decade. Plummeting share prices haven't created a great value play, as some might be tempted to believe, though, as it might for any number of solid companies like General Electric Co. (NYSE: GE), 3M Co. (NYSE: MMM) or Caterpillar Inc. (NYSE: CAT), just to name a few.