As times get tougher, it’s time to look for resilient small caps
Smaller companies are often nimbler, allowing them to respond quickly to changing market conditions, adjust strategies and capitalise on emerging trends.
The S&P 500 has bounced about 25 per cent off its October lows of last year. However, the powerful rally of just a few stocks is hiding weaknesses across the board – the five largest firms (Apple, Microsoft, Amazon, Alphabet and Nvidia) have rallied over 50 per cent year to date and contributed nearly all the US benchmark’s calendar-year performance.
Other parts of the market have struggled, and domestic and global small capitalisation equities have been belted over the past 18 months.
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James Wright is a founding partner of Sayers, a modern advisory and investment business.
