Small Cap Stocks Are Popping Off and What That Means

I was surprised to see equity markets off to such a bullish start. Really. I had to see it for myself. So I made this chart.

The Russell 2000 is up 15% YTD. WOW. 15%... Already. Imagine how that might look at an annualized rate - say if it rises another 15% next mont, and after that. We are talking about a 180% return in 12 months. That is unheard of in markets. Now I don't know how this all ends of course, but the bull market just rages on. I had been following the US Dollar wondering if any strength there would tilt markets downward. So far the answer is no. Just wow.

I tweeted this a few months ago when the small cap index was just barely moving: "Small cap value is now up almost 8% over the last five days. The two most hated areas of investing: small caps and value, wrapped into one. I love seeing this. If you really want to jumpstart the economy, you go to the small caps. 2,000 companies that employ 8+ million people."

I still stand by this. Small caps is where business really happens. Small cap businesses and the decentralization of corporations, small companies all working hard in their local community, are really the future of the economy. These are the people and companies we need to keep supporting.

Now of course, the Nasdaq-100 is still performing really well. It's also up about 6.3% and the S&P 500 is up 4.5%. The Dow of course is lagging. 30 large cap companies. People are tired of large caps. Of big corporations. This explains some of Bitcoin's and cryptos boom.

The tide is turning.

Small companies are the new wave.

Let's see what happens. I will update this chart again in the coming weeks or month to see what everyone thinks.

By the way, I am aware markets from crypto to equities are ripping. Be careful. Never let euphoria let you make bad decisions. Slow and steady wins.