FYI: The next couple of weeks would be an ideal time in which to cull your portfolio of small-cap stocks and decide which large caps to add in their stead.
That’s because large-cap stocks typically outperform small caps in the last quarter of the year. This is very much contrary to the long-term historical pattern, of course. As many of you no doubt know, since 1926, small caps have significantly beaten large caps — by 2.4 percentage points annualized, according to data from University of Chicago professor Eugene Fama and Dartmouth College professor Ken French).
What you may not know, however, is that this annual average masks distinct seasonal patterns to the relative strength of small- and large-cap stocks, as you can see from the accompanying chart. Small-cap strength is strongest in January, gradually weakens as the year progresses — and that strength flips to weakness in the last quarter of the year.
Regards,
Ted
https://www.marketwatch.com/story/why-you-should-avoid-small-caps-for-the-rest-of-the-year-2018-09-11/print
