Small cap stocks have been on quite a tear the last few days, with the Russell 2000 marking its best 5-day run of performance since the first half of 2020.
As an investor, buying into strength can be challenging, especially exceptional strength. However, history shows that strong performances in small caps often lead to continued gains.
Since 1984, when the Russell 2000 rose 10%+ over 5 sessions, it was higher 91% of the time 12 months later, with an average return of nearly 37%.
Will this time be different? Time will tell, but historically the odds favor continued strength in small caps following setups like we’ve seen recently.
Let’s stay informed and make data-driven decisions for a more robust portfolio!
