The final leg in what could be a new market high has been paved with junk.
Leading the 2013 charge has been an array of what usually is considered the lowest-quality and riskiest assets available - stocks with the highest percentage of short interest and companies that don't pay dividends.
It's all part of the dash-for-trash trend that has seen investors forsake the safety of large-cap dividend payers with solid balance sheets and earnings outlooks and look simply for companies whose shares have been taken down and present value opportunities. (Read More: Why Companies Have Gone Sour on Stock Market)
Amid this trade, the and Dow Jones industrials both are just short of eclipsing their 2007 highs.
"When the markets tend to be expanding like they have so far it's the value stocks that generally lead the way out," said Tim Courtney, chief investment officer at Exencial Wealth Advisors in Oklahoma City. "The value stocks are going to have some warts, they're going to have some problems, they're going to have high short interest in many cases."
Bespoke Investment Group runs an analysis of stock performance by breaking the market into 10 different characteristics and found that in January, when the S&P 500 gained more than 5.5 percent, it was not the index's top quality companies that led the way.
Instead, it was those that had the highest level of shares shorted as compared to the total available, a group that gained 9.6 percent in January. The other strongest performer was the group that did not pay dividends, which rose 9.9 percent, which easily outdistanced the 5.8 percent collective gain from the 50 highest-yielding stocks.
The company with the greatest percentage of short-sellers was JCPenney, which has gained nearly 25 percent in the past three weeks despite an array of problems, not the least of which came from a dispute with bondholders over a $1.5 billion line of credit. More than 46 percent of the retailer's shares are held short.
Courtney said the anticipation of tax changes probably pushed investors into buying dividend payers late in 2012, a trade that reversed after the "fiscal cliff" battle in Washington abated. (Read More: Obama Seeks Budget Bandage to Forestall 'Sequester' Cuts)
"In pullbacks, these weak companies get crushed," he said. "But when it looks like we're expanding and we're not going to tip into recession they lead the way."
Risk also has dominated in the fixed income markets, which high yield returning just 1.3 percent as one of the few bright signs on bonds. That's a reflection of investors who have tired of bonds and are looking for stocks as areas to up risk, Courtney said.
"People on the fixed income side have gone out too far just trying to find yield wherever they can find out. They have bid up prices so high that now stocks look really attractive relative to bonds," he said. "Now people are pouring money into stocks."