Small cap stocks have been the place to be. Just like they were the place to be from 2002 through 2008. Then 140% of gains over six years disappeared in an instant. This time we have 260% of gains over five years in an economy that has never recovered. I wonder what will happen this time. I’m sure everyone has a plan. Until they get punched in the mouth.
For some perspective on the current state of the stock market, today’s chart presents the long-term trend of the Russell 2000 (small-cap stocks). As the chart illustrates, the Russell 2000 rallied from late 2002 into the mid-2007 and then effectively gave all of that back during the financial crisis. Since the financial crisis, the Russell 2000 has been rallying sharply to the upside (with the exception of a brief “fiscal cliff” induced selloff in November 2012). Since early March 2014, however, the Russell 2000 has moved significantly to the downside and is now testing support of its upward sloping, post-financial crisis trend channel.
“There is ALWAYS a buyer.”
So, no problemo!
Greater fool theory, everyone always thinks the other guy is the greater fool. From our lowest IQs, to the MENSA members, it is always the other guy.
Good luck with that!
I’m beginning to sense the calm from those around me as nothing more than the final commitment to go ‘all in’, leaving their justified apprehensions at their brokers offices, settling in to a ‘its out of my control now – I’ve made my decision’ mentality.
‘its out of my control now – I’ve made my decision’ mentality.
it’s called roulette, this sense of calm is your cue to double down, Tommy.