| Small cap companies derive a larger portion of their revenues from domestic operations than their large-cap counterparts. This aligns well with Trump's "America First" economic agenda, which emphasizes boosting domestic growth and manufacturing. Small caps will benefit disproportionately from increased domestic economic activity. During his first term, Trump implemented significant corporate tax cuts through the Tax Cuts and Jobs Act of 2017, reducing the rate from 35% to 21%. This had an outsized positive impact on small companies, which - prior to the reform - generally paid higher effective tax rates than large multinational corporations. Trump has signaled his intention to not only maintain these lower rates but push the corporate rate as low as 15%. That will provide an even greater boost to small cap profitability. The first Trump administration pursued deregulation across various sectors, reducing compliance costs and operational burdens. These policies made it easier for small businesses to expand and invest since they have fewer resources to manage regulatory complexities. Trump's protectionist trade stance, including increased tariffs on imports, will create challenges for large multinational corporations with extensive global supply chains. However, small cap companies with primarily domestic operations are insulated from these pressures. In fact, they will benefit if higher tariffs lead to increased demand for domestically produced goods and services. Small companies tend to be more sensitive to domestic economic conditions than their larger counterparts. Trump's policies aimed at stimulating economic growth and boosting consumer confidence will create a favorable environment for them. The market surge has already begun to reflect the potential benefits of Trump's policies for small companies. But this initial enthusiasm, in my opinion, is just the beginning of investor interest in the small cap sector. Over the past several years, the so-called "Magnificent Seven" have delivered the lion's share of the return for the S&P 500. However, their technological innovations will expand beyond this small group of mega cap companies to benefit the broader economy. As this process unfolds, smaller companies will reap the rewards, driving their growth and their share price performance. Yet there is still another big reason that small cap stocks should outperform larger companies in the months ahead. It's called "reversion to the mean." Historically, there has been a cyclical pattern of leadership between large cap and small cap stocks. An analysis of nearly 100 years of data reveals that changes in leadership between these two segments tend to occur approximately every 12 years. The current cycle of large-cap dominance has persisted for over a decade, suggesting that a transition to small cap leadership is on the horizon. One of the key factors supporting the case for small cap outperformance is the significant valuation gap that has developed between large cap and small cap stocks. Current valuations for small cap stocks have been near their lowest levels relative to large caps in 25 years. This creates a potential springboard for small cap stocks, offering substantial upside. Over the long haul, large cap stocks have returned about 10% per year on average vs. 12% for small caps. (Smaller companies tend to be more volatile and deliver higher returns to compensate shareholders.) And the best small caps generate significantly higher returns. That makes now an ideal time to increase your exposure to small companies. The economic agenda proposed by the incoming Trump administration creates a particularly favorable environment for them. Small caps were already due for their turn in the limelight. And now their domestic focus, magnified benefit from any tax rate reductions or deregulation, and insulation from multinational trade tensions make them uniquely aligned with the ruling party's interests... and the biggest beneficiaries of the "Trump effect." Good investing, Alex P.S. Today I'm making my new Microcap Millionaire Academy that I built for 2025 available to you. And I wanted to reach out and make sure you can access it. Inside you'll get the ticker symbol on one of my favorite small cap gold stocks. But it's more than that. This academy is based on a new way to target small cap stocks. Find details right here. | 
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