Daily Gains Letter ( — www.DailyGainsLetter.com) an e-letter of Lombardi Publishing Corporation, a 29-year-old consumer publisher that has served over one million customers in 141 countries, is commenting on how small-cap stocks are outshining the NASDAQ and the S&P 500 and how they could be a top investment in 2015.
“While small companies underperformed in 2014, with the Russell 2000 gaining a mere 3.53%, compared to the 13.40% and 11.41% advances by the NASDAQ and S&P 500, respectively, as long as the current economic renewal holds, small-cap stocks could turn things around this year,” says financial analyst George Leong.
So far in 2015, small-cap stocks are second only to the technology sector, and the Russell 2000 is up more than two percent versus a 4.88% move by the NASDAQ. At this time, small-cap stocks are beating the S&P 500 and DOW, so while it’s still early, small-cap stocks are looking solid after coming off of a soft year in 2014.
“Whether small-cap stocks can return the kind of performance investors saw in 2013, when the Russell 2000 advanced 36%, is not certain, but I like the prospects for growth investors,” Leong adds. “The reality is that small companies tend to fare better as an economy recovers due to the added flexibility to shift strategies on the run and adapt to changing situations. Imagine a large-cap trying to be nimble and change on a dime; it’s not so easily done.”
Leong explains that he favors small companies that show strong growth metrics and have consistently managed to deliver strong results. One sector that provides the top risk-to-reward opportunities for both traders and investors continues to be the technology sector, namely the mobile, chip manufacturing, and Internet spaces.
According to Leong, these are the higher-beta elements of the small-cap sector, which translates into added risk; they also offer greater reward potential. Dividend-paying small-cap stocks also make sense for those seeking both capital appreciation potential and income.
“I view small-cap stocks’ weakness as a potential trading or investment opportunity at this time, as valuations tend to be more attractive and worth a look for aggressive investors,” Leong concludes. “Overall, investors need to be diversified as far as market capitalization and sectors go.”
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Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.
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