Can The Russell 2000 Continue To Outperform???
They say the Russell 2000 leads the way down and leads the way up. The Russell 2000 index represents the largest 2000 small cap public companies in the US. Some of the largest companies that trade on the Russell 2000 include Teladoc Health, Lumentum, First Industrial Realty Trust and Deckers Outdoor Corp.
Usually towards the end of the business cycle, rising interest rates hurt smaller companies the most because they have a higher debt to earnings ratio and lower free cash flow relative to much larger companies. Also, smaller companies are more volatile and tend to react and respond to changes in economic conditions and changes in investor sentiment first. And since late 2020, the Russell 2000 has been outperform all the other US equities on hopes of the economy reopening. But can the Russell 2000 continue to outperform.
The chart suggests, if the economy is just getting started, to buy at the daily demand at 2134.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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