Model evidence
Do stock ratings beat the market?
We tested every Qualtix rating since 2017 against the S&P 500. The top rating beat it: 60% of Strong Buy stocks finished ahead of the S&P 500 over the next 12 months. Buy stocks were about level with the market, and Hold and Sell stocks trailed it more often than not. Historical test. Figures as of October 10, 2026.
A rating is worth something if stronger ratings do better than weaker ones. In this test they did, in order: Strong Buy, then Buy, then Hold, then Sell. Strong Buy stocks returned +48.1% on average over the next 12 months, against +25.3% for the S&P 500 over the same months.
One rating only tilts the odds. The combined result of seven rule-based portfolios, each holding 10 or 15 Strong Buy and Buy stocks, beat the S&P 500 in eight of nine full calendar years and in the partial 2026 period: 22.7% a year against 15.1% for SPY. In 2022 they finished 0.4 points behind it. Two individual portfolios beat it in all ten measured periods, four in nine and one in eight. The portfolios were selected after testing many strategies, which flatters their results.
Qualtix ratings 12 months later: 33,806 ratings on 1,170 US stocks, 2017 to 2025, dividends included
| Rating | Ratings | Average 12-month return | S&P 500, same months | Beat the market |
|---|---|---|---|---|
| STRONG BUY | 891 | +48.1% | +25.3% | 60% |
| BUY | 1,242 | +20.2% | +16.4% | 50% |
| HOLD | 24,779 | +18.4% | +15.6% | 44% |
| SELL | 6,894 | +16.7% | +15.1% | 40% |
What A Rating Cannot Do
- Many Strong Buy stocks still trailed the market. The edge is in the group, not in any one stock.
- The model portfolios lost money in 2022, when the whole market fell.
- The model was developed on part of this period, so future results are likely to be weaker than the test.
- Past results do not predict or guarantee future results.
How A Qualtix Rating Is Made
Each stock gets three separate scores: business quality, valuation, and entry timing. Fixed rules turn them into one of four ratings. AI explains the rating in plain English and cannot change it.
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Qualtix is for research and education only. It is not financial advice.