At this point, the consensus on the street is that returns would be modest in 2025. Sure, given that valuations are expensive, and also considering the gains of the last four years that most are sitting on, returns on an overall basis could be modest. But if you bring stock selection into the picture, the outcome could be different. If you are able to pick the right stock and if you are not leveraged, then the odds of getting better returns is higher. While this is applicable to all the segments of the market, it is crucial when it comes to the small-cap segment. The reason: Divergence in performance within the small-cap segment has historically been high. So, stay with a few selected ones.
