No. of Recommendations: 6
The relative valuations of these sectors continues to greatly favor small cap over large cap.
Scroll down to find chart of the small cap S&P 600 and large cap S&P 500 forward PEs, links originally provided by Manlobbi upthread:
yardeni.com: S&P 600 | Charts | Yardeni Researchyardeni.com: S&P 500 | Charts | Yardeni ResearchI'm a fan of small-cap value and while I don't have readily accessible charts to show it, I'm sure it benefits from the same relative valuation advantage as small cap in general, possibly more so.
When stock market volatility increases, small cap, and small cap value often have outsized moves compared to large cap. I.e. right now the S&P 500 is down 1.4% compared to Vanguard Small Cap Value ETF (VBR) down 2.2%.
So, we're at a spot where relative valuations greatly favor small cap, absolute valuations are a bit below the long term average, and volatility is picking up.
If this correction turns into a bear market, it will be an excellent time to buy small cap/small cap value, IMO.
