FYI: The small-cap premium has been a penalty of late, and therein may lie opportunity. Shares of big companies, like Microsoft (MSFT), have outpaced those of small companies by quite a bit in recent years. So pronounced was this trend over the past year through June 2019 that the mega-cap Russell Top 200 Index's 10.9% return beat the small-cap Russell 2000 Index by 14.2 percentage points. Apart from between October 2013 and November 2014, that is the Russell Top 200's biggest one-year edge over the Russell 2000 since the late 1990s. The difference between now and that 2013-14 time period, however, is that in 2013-14, mega-cap companies' trailing 12-month earnings on average traded at a 13% to 17% discount to small-cap companies' earnings, whereas now those earnings cost about 16% more. Buying small caps may once again reward long-term investors more handsomely than mega-caps if history repeats, something that's still the case over the past two decades.
Regards,
Ted
https://www.morningstar.com/articles/944181/an-opportunity-to-get-small
