As rates fall off as the Fed looks to cut further in the next year or two, investors looking to diversify beyond the top-heavy S&P 500 may wish to do so before the often-neglected smaller-cap names have a chance to shine again. Indeed, the small- and mid-cap wave rose sharply on three separate occasions in the past three months.
The wild ride for the small-cap stocks may not be over quite yet. That said, if you’re light on the small-cap stocks, have the desire to diversify away from the mega- and large-caps, foresee much lower rates in 2025, and don’t want to be caught watching the next small-cap wave from the sidelines, scooping up a Russell 2000 exchange-traded fund (ETF) makes a lot of sense right here.
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