Why now may be the time for investors to check out small caps

Market Trends & Analysis - Small caps have outperformed large caps (S&P 500 and Russell 1000) over the last seven trading days [1] - Small caps historically perform best relative to large caps from mid-December through early March [4] - The Russell 2000 (small caps) contains approximately 2,000 stocks with a market capitalization under $45 billion [2] - The Russell 1000 includes large and mega-cap stocks with a market capitalization over $10 billion [3] Investment Opportunities & Risks - Small caps are more tied to the US economy and sensitive to interest rates and credit conditions, leading to potentially larger swings [7] - Large caps tend to have global revenue streams and stronger balance sheets, offering more resilience during downturns [8] - Small caps have less concentration risk compared to the S&P 500 or Russell 1000 [8] - Analyst coverage for small-cap stocks is generally lower, requiring more thorough individual research [8] Technical Analysis & Key Levels - The iShares Russell 2000 ETF (IWM) faces a key resistance level at $240, corresponding to the 2400 level on the Russell 2000 index [9] - Holding above the 2400 level for the Russell 2000 is a critical test for a sustained rally [10] - Investors should monitor whether small caps continue to outperform even with typical market pullbacks [10][11]