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Small Cap Stocks still in the DANGER ZONE 231008

The Stock Market has been in a correction mode for over two months.  Under the surface, I think it’s even worse.  Small Cap stocks, which are a broad representations of the general economy, have been struggling at their long term moving average for 18 months.  From a performance perspective it’s even worse, Small Caps closing price on Friday was equivalent to its value during the summer of 2018…that’s over FIVE years of stagnation.

Note the below chart which illustrates Small Caps over the past quarter century.  Failure to breakout above its long term moving average has always resulted in a broader stock market meltdown. 

Maybe this time it will be different.  But for now, the majority of my money is remaining safely parked in money market funds that are paying a REAL rate of return and are not vulnerable to either equity or bond risk.

In this week’s Wealthsteading Podcast episode, I’ll discuss all this and more. 

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