Editor's Note: All eyes are on Fed Chair Powell's upcoming Jackson Hole speech, where he'll address inflation, labor markets, and potential rate adjustments. With recent data sending mixed signals - hot retail sales, dropping jobless claims, and a rebounding S&P 500 - investors are on edge. Fortunately, Alexander Green's timely summit - happening just two days before Powell takes the stage - offers a strategic advantage. Green's insights could prove invaluable as investors prepare for potential market-moving announcements from the Fed. On August 21, at 7 p.m. ET, Alexander Green is hosting an urgent online summit to reveal: - Why the Fed's next move could send Power Stocks soaring
- His top 3 Power Stock picks for potential 1,000%+ gains in the next year
- A LIVE Power Stock recommendation (ticker symbol included)
Don't miss this rare chance to get ahead of Wall Street. To reserve your free spot at Alexander Green's Emergency State-of-the-Market Summit, simply click HERE. (Clicking the link above automatically registers you for Alexander Green's Emergency State-of-the-Market Summit, a free subscription to our e-letter Liberty Through Wealth, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. Privacy Policy.) - Ryan Fitzwater, Publisher Alexander Green, Chief Investment Strategist, The Oxford Club There's one equity class that is likely to seriously outperform for the remainder of the year: microcaps. For several reasons, they offer the best opportunities in the market right now. Let's start with a bit of background... In a bear market, large cap stocks hold up better than midcaps. Mid Caps hold up better than small caps. And small caps hold up better than microcaps, the smallest of small cap stocks. However, history also shows that when the market lifts off in earnest, midcaps outperform large caps, small caps outperform midcaps, and microcaps outperform small caps. In other words, the whole process reverses. But it hasn't happened - yet. Although the bear market bottomed in October - 2022, this "reversion to the mean" hasn't happened yet. As every investor knows who is paying attention, the Magnificent Seven: Apple, Amazon, Meta, Tesla, Microsoft, Alphabet and Nvidia are responsible for practically the entire gain in the S&P 500. Indeed, Nvidia alone is responsible for 30% of the gain in the index this year. Yet, as you can see in the chart below, history shows that microcaps outperform everything over the long haul. It isn't even close: $1,000 invested in large caps a century ago–with dividends reinvested–is worth $12.8 million. The same amount invested in small caps is worth $35.4million. And $1,000 invested in a diversified portfolio of microcaps is worth $55.3 million. The trade-off for this $42.5 million in outperformance is - you guessed it - greater volatility along the way. This is especially true of those microcap companies that are not yet profitable. But pre-profit is not the same as pre-revenue. I have never recommended a microcap that doesn't already have substantial sales growth. And there's a good reason for that. |
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