- December 8, 2022
- Posted by: Stratford Team
- Category: Economy
It would appear that in 2022 US large cap and small and mid cap companies have performed similarly, considering the roughly equal market declines.
However, beneath the surface the picture is very different. This is because a change in market leadership is underway which we think will continue into 2023, and potentially longer. Although large caps outperformed strongly in January 2022, since then small and mid caps have been steadily outperforming.
In theory, this is at odds with a US economy that is expected to slow down into a possible recession in 2023. Normally small and mid caps are considered less resilient in a more challenging economic environment.
There are reasons this leadership change is taking place and it is reminiscent of a similar time which led to an extended period of outperformance by small and mid caps.
Both in the 1970s and after the bursting of the technology bubble in 2000, US smaller companies performed much better than…
