Small-cap Leadership

JC Parets
January 17, 2024

Many Small-caps have been leaders from the very beginning of this bull market.

Even through the first couple of weeks of 2024, which haven't been great, Small-cap Industrials are still up over 42% since the Summer '22 lows. Small-cap Consumer Discretionary is up over 37%.

Both of these have outperformed even the S&P500 during this period.

So maybe the "Russell2000" has underperformed. But that doesn't mean that "Small-caps" have underperformed.

It's on a case by case basis.

Here is a list of our Minor Leaguers, for example, which include the strongest stocks between $1 Billion - $4 Billion in market cap:

Notice the industry groups on this list.

We're looking at Retail stocks, REITs, Asset Managers, Oil & Gas and other groups that don't get many headlines, especially these days...

Check out our favorite trade from this group here.

The markets continue to evolve and sectors keep rotating.

It's up to us as investors to be able to adapt.

You see investors struggling to do this, especially in the bond market.

The 60/40 portfolio has really been the "100 portfolio" for quite some time now as stocks and bond have been moving together (60 + 40 = 100).

The US Treasury Bond market has NOT acted as a safe haven. It's been moving with risk assets.

You can see so far this year since the S&P500 peaked in late December, the major indexes have been correcting, and the Bond Market has gotten hit even harder.

It's up to us to identify what type of market environment we're in, AND THEN decide which tools and strategies are best for that environment.

Most investors completely skip that first part and just try to incorporate their "Strategy" into the market, regardless of the type of environment we're in.

That's too hard.

I'd rather just play the cards we're dealt instead of pretending we have a certain hand.

Play the cards you’re dealt.

Join us tomorrow evening for our LIVE Conference Call for Premium Members of ASC.

We'll be going over the current environment, which groups of stocks we want to own, which ones we want to avoid, and how rates, energy and gold fit into the mix.

REGISTER HERE.

See you tomorrow, Thursday January 18th @ 6PM ET.

Bring your questions!

JC

 

Filed Under: