Around the time that the internet bubble burst, small caps started to outperform large cap stocks. And they continued to do so through the bear market and the subsequent bull market.
Now it seems that large caps may be getting the upper hand once again. Here’s a chart of the S&P SmallCap 600 compared to the S&P 500 index:
Any ideas why the market prefers small caps to large caps? It may have something to do with the weak dollar and how the large caps have international earnings which are now “worth” more in dollar terms. But really, I have no clue.
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