Are Small Caps Overvalued?

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Are Small Caps Overvalued?

(New York)

Many investors might be thinking that small caps look like a good buy at the moment. Between trade tariffs, the new tax package, and the president's general focus on economic nationalism, small caps seem to have a lot of wind in their sails. But the big question for investors should be whether they are overvalued. The Wall Street Journal says the asset class is overvalued, as the market has gotten overly optimistic about small cap growth prospects and is valuing the stocks too richly versus their current earnings, especially given rising interest rate risk in the economy.

FINSUM : The WSJ used an unusual valuation metric to assess the sector (EV/EBITDA), but overall the sector looks richly valued. So is every other asset class.

  • stocks
  • small caps
  • Trump
  • tariffs
  • taxes

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks

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