Small Companies are Getting Fashionable Again?
Igor Manukhov - Jan 05, 2024
Small companies are showing positive signs of relative strength versus large companies for the first time in a while. I would watch them.
Welcome to 2024. The massive rally that we had at the end of last year finally saw small companies start to outperform large companies in the US (notice how the red line is trying to start an uptrend). This is the first time that happened in the last few years. It is too early to tell if this is just a fluke or the start of a new trend, however it is something worth paying attention to. In absolute terms, the Russell 2000 (small company index in the US) is trying to breakout from a sideway trading range since early 2022. Naturally, after such an impressive rally, the market will need to take a breather, but if this relative strength persists, adding exposure to small companies within the portfolio would make sense.