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What Catalyst Turns The Small Caps? - Real Time Insight

Anyone with small caps in their portfolio must know this tale I am about to re-tell....Let's start it again with yesterday.

The Russell 2000 (RUT) index bounced to 1120 in the morn. In the afternoon, it plunged back to 1097. Five days ago, it was 1140. In early March, just two months ago, it hit an all-time high at 1,213. That's a drubbing of -10.5%.

Technical folks call that a bona fide correction.

Just before Xmas, the RUT briefly hit a previous high near that 1,213 mark. A year ago, it was around 942.

Going from that May 2013 mark of 942 on the RUT to 1097 this May 2014 morning makes a +16.3% return.

Let's go further back. Back in summer 2011, the RUT plunged numerous times to around 600 during the European debt crisis. It ranged (up-and-down) around 650 for months. Loosely call that 3 years to keep the analysis simple. The 3 year return is +45.2% from then. Or around +15% a year.

My point? +15% annual returns for a small cap index is not excessive in my mind.

That leads me to my Real Time Insight (RTI) question.

My RTI question: What Catalyst Turns the Small Caps Around?

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


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

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