Why look at small-caps when there are many large-cap stocks available at decent valuations? But then, a counter-question: When is it a good time to buy small-cap stocks? When they are rising every second day? Or when there is a correction and the commentary is all negative? The answer is obvious. In early 2024 or before that, in 2023, you could pick almost any small-cap stock and be a winner. That will not happen any more. So, avoid “narrative stocks” and stay away from those with high valuations without matching earnings growth. But that does not mean you should avoid all small-cap stocks. It is probably time to look at them rationally.
