Is the Small-Cap Rally Already Over?

The Russell 2000 has outperformed the S&P 500 for a remarkable 14-and-a-half years. The index reached a low relative to the S&P 500 on April 8, 1999. It’s interesting to see how the little guys were largely left behind in the big rally of the late 1990s.

Ever since then, the Russell has consistently outperformed the broader market. If the S&P 500 had kept pace with the Russell, it would be over 3,600 today. The most recent relative performance high came on October 1 of this year.

Since then, the small-caps have badly lagged and it got much worse last week. The Russell 2000 has underperformed the S&P 500 for the last six days in a row. Historically, these outperformance/underperformance cycles have run on for several years.

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Posted by on November 4th, 2013 at 12:54 pm


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