Big Rally… Small Stocks
- Small-cap stocks have led the rally in 2018 so far, outperforming both mid- and large-cap stocks. Small-cap stocks, as represented by the Russell 2000 Index, are handily leading the market, posting a gain of 11.23% versus 5.9% for the S&P 500 as of July 23, 2018.
- A small-cap company is generally classified as a company with a market capitalization (market value of outstanding shares) of between $300 million and $2 billion, whereas a large-cap company carries a market capitalization of more than $10 billion. Thus, these companies are not exactly your mom and pop shop on the corner, but in the business world, they are still considered small.
- This week’s Thought for the Week examines what is driving this small-cap rally, and explains what it could mean for investors.