Are Small Caps Set for a Comeback?
Give the little guy a chance.
Funds tracking the Mag 7, the S&P 500 or any large cap companies are bedrocks in many clients’ portfolios, thanks to their relatively low risk and stable returns over long periods. Meanwhile, many advisors and clients have moved away from small cap stocks and funds that track them due to less-than-stellar returns for more than a decade. However, large cap stocks are currently overvalued by 2%, while small caps are undervalued by 4.6%, according to Morningstar analysts. That could set up a classic “buy low, sell high” investing opportunity.
“Generally speaking, high returns are followed by things with low prices,” said Gregg Fischer, founder of asset management firm Quent Capital….
