Value stocks and small-cap stocks are more than likely to outperform growth and large cap stocks, immediately after a recession. Can someone enlighten on this Tx in advance
The most beaten down stocks (hence value stocks) during a recession will most likely have the highest gains relative to growth/large cap stocks when the economy recovers, not coincidentally most of these beaten down stocks are small caps.
Tx for the answer. Can understand the value stocks answer… Small caps don’t do well in a recession and it has the potential to go up in the aftermath of a recession. I guess
Generally, less able companies do very poorly when the economy is in downturn, but perform exceptionally better than more able companies at the peak of an economic cycle. This probably explains why there is so much more volatility for less able companies. This is just a generalisation, not all small caps are bad companies.