Small-Caps Edge Ahead in 2021
Posted on Friday, February 26, 2021
So far in 2021, small-cap stocks are leading the market by a wide margin.
The advantages of including small company stocks in an equity portfolio are occasionally very clear, as is the case so far in 2021. Large-caps are up 2% for the year through the end of February, but the S&P SmallCap 600 is up 14.5% for the year. Even the broader Russell 2000 is up 11.5%.
This isn’t something that you’ve likely seen in media headlines, so you’re forgiven if you’ve assumed that the “lagging” Dow Jones, or the “beaten-down” tech-heavy NASDAQ, or the “skidding” S&P 500 means that all stocks are facing a tough year. Plenty of small-caps are performing well on the basis of sound fundamentals.
Of course, focusing on near-term trends and intraday market swings can be detrimental to a sound investing strategy. What happens to vaccine makers or big tech stocks or green energy plays or hobbled retail store chains or meme stocks thus far in 2021 will not likely have much impact on the long-term performance of the broader market or your portfolio.
Our approach remains the same as ever, seeking the best opportunities for growth and quality at a reasonable price. Our track record remains positive and our commitment to delivering interesting small company opportunities is as firm as ever,
Reprinted from the March 2021 issue of the SmallCap Informer.
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