Wall Street Is Ignoring This Part of the Market. That's Why I'm Interested.
Small caps trade at a 20% discount to large caps, but their earnings are about to grow faster. It's time to consider buying.
Wall Street Is Ignoring This Part of the Market. That's Why I'm Interested.
Overview
Everyone on Wall Street is watching Nvidia, Apple, and the artificial intelligence (AI) trade. It's understandable, given that the "Magnificent Seven" stocks have generated huge returns over the past three years.
The part that few people are paying attention to right now, though, is the other end of the market cap spectrum. Small caps and the Vanguard Small-Cap ETF (NYSEMKT: VB) have become legitimately attractive investment options right now. This fund is up 25.5% over the past year, beating the 22.7% return of the Vanguard S&P 500 ETF over the same period, even as large-cap tech is roaring.
Details
The improving earnings outlook for this segment, along with comparatively attractive valuations, makes this a strong buy candidate over the next several months.
Source
Originally published at www.fool.com.
