FYI: Small-company stocks have begun the year with the wind at their backs. They’ve risen 3.4% through the first half of January, a strong kickoff by historical standards. There is some evidence that a strong January points toward a strong year.
Many people are making the bull case for small-caps as an asset class, and it’s an appealing one. The U.S. economy is still getting better, and earnings are rising. The new administration has been mostly friendly to business. Away from the soap opera, it has been cutting back federal regulations, and the new corporate tax cut should boost net earnings.
Meanwhile, the bull market for small-caps is less than two years old. The Russell 2000 tumbled 25% between July 2015 and February 2016. Such bear markets are usually followed by longer uptrends in stocks.
Regards,
Ted
http://www.cetusnews.com/business/Unseen-Dangers-in-Small-Cap-Stock-Rally.rkeaKTUeSG.html
