FYI: Small-cap stocks are on a roll this year, but anyone buying now may be wise to stick with higher-quality companies, or funds that invest in them.
While the Russell 2000 index of small-capitalization stocks is up about 13% so far in 2019, beating the 10% return of the Russell 1000 index of large-caps, investors may have grown complacent about the risks involved, according to Richard Turnill, global chief investment strategist for BlackRock .
Small-cap stocks are tightly correlated to swings in global purchasing managers index (PMI) data, he pointed out in a blog post. And small-caps have jumped this year without a corresponding improvement in global PMI figures—a sign that sales and profits may not rise enough to justify the higher stock prices.
Regards,
Ted
https://www.barrons.com/articles/small-cap-stock-rally-etfs-risky-51552328560?refsec=funds
