- SUMMARY
There’s speculation that small caps will continue to struggle if interest rates stay high for an extended period.
However, experts believe that if the Federal Reserve cuts rates in June, it could boost growth stocks and small caps.
Investors are also cautioned to be patient before investing in small caps, as they tend to perform better at the beginning of economic cycles, which may not have started yet.
Despite the recent dip in the stock market, other assets like gold and Bitcoin have hit record highs.
The introduction of Bitcoin ETFs is expected to draw more interest in cryptocurrency, especially among retail investors.
- Key Takeaways
Interest rate fluctuations impact small caps.
High interest rates can hinder growth, leading to struggles for small caps, while rate cuts may benefit these stocks (Federal Reserve rate cuts in June could boost them).
Economic cycles influence small cap performance.
Small caps generally perform well during economic growth, but investors should exercise patience as the economic cycle’s start remains uncertain.
Alternative assets may provide returns amidst market volatility.
Gold and Bitcoin have shown resilience despite the market dip, with Bitcoin ETFs poised to drive further interest in crypto within the retail investor space.