A:

The big uglies are stocks that the investing public does not find attractive. Industrial companies like steel, mining and oil are considered big uglies because investors favor the more contemporary investment opportunities, like those in the technology sector. Stocks in the big uglies category often sell at low prices because of their unpopularity - which means the big uglies often are priced below value.

While the big uglies may not be as appealing to investors as much as tech stocks, they typically offer good long-term earnings, growth and dividends. Savvy investors realize the benefits of including the big uglies into their portfolios, while investors looking to get rich quick tend to overlook the low price-to-earnings ratio of the big uglies.

Regardless of what is flashier, an increasing number of investors will turn to the big uglies during times of market decline for the relatively secure earnings they offer.

For more on this topic, read Using the P/E Ratio and A Guide to Investing in Oil Markets.

This question was answered by Bob Schneider.

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