☕ Are small caps the next winners?

Good morning! 👋 

Keith remains out there somewhere on two wheels, so do let us know if you spot a wild Keith anywhere and bonus points if you get a snap of him or can lure him back with a cookie!  
 

In the meantime, I wanted to talk about something that keeps popping up: small caps. 

Let’s break this down: 

1. Keith has said it before, and it still holds true: you’ve got to be incredibly selective. 

Small and mid-caps can work, but only if you pick your bets very carefully.  

Unlike large caps, they don’t offer the same balance sheet strength or defensive power. And in today’s market, the small caps that do have real quality often get snapped up before they ever go public.  

That makes true opportunity rare (but obviously possible), and harder to spot through the hype. 

Talking of which, Keith spoke about this last year. (Watch)

2. Small caps are often talked up as the “next big thing”- but that’s usually after the easy money’s already been made. 

Wall Street’s job isn’t to help you - it’s to separate you from your money. 

That’s not personal; it’s just how the game is played. Hype sells. And when a sector suddenly gets loud, it usually means the big money’s already cashed in and moved on.  

3. Big caps - especially U.S. Big Tech - continue to dominate. 

To a point Keith makes: Never switch horses when you’re winning the race.  

These are the companies with fortress-level balance sheets, global scale, and AI tailwinds powering the next leg of growth. 

They may not be the flashiest trade of the day, but they’re built to last. And that matters - especially if you’re playing for dollars over time, not pennies in the moment. 

The data shows us this as well, over every major timeframe (1, 3, 5, 10, and 20 years) both the Nasdaq 100 and S&P 500 have dramatically outperformed the Russell 2000, which tracks smaller, more volatile U.S. companies. 

Anyway, on that note. 

Remember one last thought… something you hear Keith say frequently. 

Our world is accelerating, as is innovation. Odds are very, very good that there will be more profits created in the next 10 years than the last 50 combined. 

As always, let’s MAKE it a great day. 

You got this – I promise! 

Hayley E (Analyst) 😀