The markets have rallied since the New Year, but skeptics are quick to point out that there's no solid basis for the growth.

Comstock Partners wrote, "In our view, even the mild recovery seen to date is unsustainable. When we look at the numbers, it is difficult to tell where additional growth will come from."

Indeed, he goes on to suggest that, historically, when debt/GDP ratios exceed 90% the following period was marked by "slow growth and frequent recessions."

To add fuel to the fire, he goes on to point out the downside of current trends in higher consumer spending -- "this was accomplished largely by reducing the household savings rate from 5% to 3.5%, the lowest rate since the economy peaked in 2007" -- and the housing market: "housing is still in the doldrums with additional home price decreases still likely as a result of the backlog of foreclosures."

"Summing up, we see lower consumer spending growth, declining government spending at all levels, less exports and lower capital spending. That pretty much accounts for the entire GDP ... Under this scenario the current market rally does not have far to go and the downside risks are high."

Risk ahead
Corporate earnings estimates are already being slashed, and although earnings season has just begun, the number of disappointments has outweighed the upsides. Investors who are riding the rally may need to reflect on its sustainability.

And if what Comstock Partners reports is true, then U.S. markets, and perhaps global markets, can expect high risk ahead -- more volatility and recessions intermixed with periods of calm seas and strong rallies. It can be a lot for an investor to account for.

Business section: Investing ideas
Worried about high-risk investments? To help you protect your portfolio against the volatility, we collected data on low risk stocks -- stocks that have had the smallest intraday price fluctuations over the last month.

In addition, all of these stocks are in rally mode -- trading above the 20-day, 50-day, and 200-day moving averages.

To refine the list, we collected data on institutional transactions and identified the names that have seen significant inflows during the current quarter.

And to further refine the list, we collected data on short-seller trends and identified the names that have seen a significant decrease in shares shorted during the current month (i.e., short-sellers think the upside of these stocks outweighs the downside)

Sophisticated investors, like hedge fund managers and short-sellers, think these low-risk stocks are going higher -- do you agree? (Click here to access free, interactive tools to analyze these ideas.)

1. Patni Computer Systems Limited (NYSE: PTI): Patni Computer Systems Limited, an information technology services company, provides a range of IT services through integrated onsite and offshore delivery locations. Average intra-day volatility over the last month stands at 1.16%. The stock is currently trading 7.17% above the 20-day SMA, 10.85% above the 50-day SMA, and 21.91% above the 200-day SMA. Net institutional purchases in the current quarter at 198.0K shares, which represents about 3.84% of the company's float of 5.16M shares. Shares shorted have decreased from 134.17K to 41.45K over the last month, a decrease which represents about 1.8% of the company's float of 5.16M shares.

2. Dollar Thrifty Automotive Group (NYSE: DTG): Dollar Thrifty Automotive Group, through its subsidiaries, rents and leases vehicles through company owned and franchised stores under Dollar and the Thrifty brand names primarily in the United States and Canada. Average intra-day volatility over the last month stands at 1.35%. The stock is currently trading 2.35% above the 20-day SMA, 6.44% above the 50-day SMA, and 5.75% above the 200-day SMA. Net institutional purchases in the current quarter at 1.0M shares, which represents about 5.57% of the company's float of 17.95M shares. Shares shorted have decreased from 3.66M to 3.33M over the last month, a decrease which represents about 1.84% of the company's float of 17.95M shares.

3. Ecolab (NYSE: ECL): Develops and markets products and services for the hospitality, foodservice, health care, and industrial markets primarily in the United States. Average intra-day volatility over the last month stands at 1.36%. The stock is currently trading 3.81% above the 20-day SMA, 7.62% above the 50-day SMA, and 14.41% above the 200-day SMA. Net institutional purchases in the current quarter at 18.3M shares, which represents about 8.69% of the company's float of 210.57M shares. Shares shorted have decreased from 10.94M to 6.30M over the last month, a decrease which represents about 2.2% of the company's float of 210.57M shares.

4. Digital Realty Trust (NYSE: DLR): Digital Realty Trust,, a real estate investment trust, through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. Average intra-day volatility over the last month stands at 1.48%. The stock is currently trading 1.41% above the 20-day SMA, 4.66% above the 50-day SMA, and 13.36% above the 200-day SMA. Net institutional purchases in the current quarter at 6.9M shares, which represents about 6.59% of the company's float of 104.73M shares. Shares shorted have decreased from 12.74M to 11.50M over the last month, a decrease which represents about 1.18% of the company's float of 104.73M shares.

5. Intercontinental Hotels Group (NYSE: IHG): InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels and resorts. Average intra-day volatility over the last month stands at 1.67%. The stock is currently trading 13.84% above the 20-day SMA, 16.78% above the 50-day SMA, and 8.60% above the 200-day SMA. Net institutional purchases in the current quarter at 9.9M shares, which represents about 3.52% of the company's float of 281.09M shares. Shares shorted have decreased from 3.69M to 590.27K over the last month, a decrease which represents about 1.1% of the company's float of 281.09M shares.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Short data sourced from Yahoo! Finance, institutional data sourced from Fidelity. All other data sourced from Finviz