Fortunately for investors in the smallest stocks, the last two months of this year may not be as depressing as they usually are. I’m referring to the historical tendency for small- and large-cap stocks to carve out opposite return trajectories at year’s end. So they will be less likely to dump their small-caps to own the large-cap stocks in the S&P 500. In the latter part of such years, they therefore would be more likely to dump their smallest stocks in favor of the large-cap stocks that dominate the S&P 500. It’s also because it is crucial to be invested in small-cap stocks in January, and those who get out now often fail to get back in on time.

Source: Wall Street Journal November 04, 2019 03:08 UTC