Size Matters

Igor Manukhov - Apr 21, 2023

Large companies continue to dominate stock performance.

Theory suggests that smaller companies can grow faster than their larger counterparts. Recently that hasn’t been the case when it comes to stock market performance. Contrary to the theory, large companies have outperformed small companies (black line represents the relative performance of large companies compared to small companies, rising line means that large companies are doing better) by 38% since 2018. That outperformance has been accelerating in 2023.

This is a reason why we focus on larger companies in our accounts at the moment, while keeping a close eye on this relative strength relationship for a potential reversal.