This is why the S&P 500 can be expected to continue to outperform small-cap stocks

by TexasDigitalMagazine.com

[ad_1]

Last year the S&P 500
SPX
returned 26.3% but the small-cap Russell 2000
RUT
trailed with a 16.9% return, both with dividends reinvested. Now take a look at longer-term returns for exchange-traded funds that track the two indexes:

ETF

3 years

5 years

10 years

15 years

20 years

SPDR S&P 500 ETF Trust

32%

101%

206%

570%

516%

iShares Russell 2000 ETF

4%

51%

93%

376%

349%

Source: FactSet

The SPDR S&P 500 ETF Trust
SPY
has outperformed the iShares Russell 2000 ETF
IWM
dramatically for all periods.

Some investors might point out that small-caps are attractive because they trade at relatively cheap price-to-earnings valuations when compared with the S&P 500. Mark Hulbert skewers this argument and explains why the S&P 500 is likely to continue to outperform the Russell 2000.

ETF Wrap: BlackRock tops market share for ETFs, but 2023 flows point to Vanguard catching up

More on the markets:

How to survive a financial disaster

Lynnette Khalfani-Cox immediately began building her own business after being laid-off 20 years ago.


Beth Pinsker

Don’t give up on your goals. This is advice from Lynnette Khalfani-Cox, author of “Bounce Back: The Ultimate Guide to Financial Resilience,” who explained to Beth Pinsker how she moved forward after being laid off 20 years ago.

Microsoft is getting closer to Apple


Getty Images

Tech stocks staged a dramatic recovery during 2023, led by the “Magnificent Seven.” Here’s how this group has performed, with dividends reinvested, since the end of 2021:

“Magnificent Seven” companies

Ticker

2024 return through Jan. 4

2023 return

2022 return

Return since end of 2021

Apple Inc.

AAPL,
-0.45%
-6%

49%

-26%

4%

Microsoft Corp.

MSFT,
+0.01%
-2%

58%

-28%

11%

Alphabet Inc. Class A

GOOGL,
-0.58%
-2%

58%

-39%

-6%

Amazon.com Inc.

AMZN,
+0.37%
-5%

81%

-50%

-13%

Nvidia Corp.

NVDA,
+2.36%
-3%

239%

-50%

63%

Meta Platforms Inc. Class A

META,
+1.28%
-2%

194%

-64%

3%

Tesla Inc.

TSLA,
+0.02%
-4%

102%

-65%

-32%

Source: FactSet

Emily Barry shows how Microsoft is narrowing its valuation gap with Apple.

Ciara Linnane reports on how bond investors are getting in on the Magnificent Seven action in 2024.

Read on:

Deal news

ARM Holdings is nearing an initial public offering expected to value the company at up to $54 billion. But New Constructs, an independent equity research firm, warns investors to steer clear of ARM Holdings, as James Rogers reports.

More news on M&A and corporate events:

Long-term and short-term for two commodities

You might be surprised at how gold has performed as an investment since the turn of the century.


Getty Images

You may be surprised by how well Gold has performed as an investment since the turn of the century, William Watts notes.

Myra P. Saefong explains how conflict in the Middle East can help U.S. oil producers. She also explains why oil prices haven’t soared, despite the conflict in the Middle East and transportation disruption.

Read: Stop buying Exxon Mobil, Occidental Petroleum stocks as oil prices should stagnate, analyst says

Which housing market will be the hottest (or most compelling) in 2024?

You might be surprised at which cold-weather city has shot to the top of Zillow’s list of “hottest markets” for housing this year.

More housing-market coverage from Aarthi Swaminathan:

Company news: Tesla loses the top spot

Tesla’s latest sales volume numbers spelled weakest for several EV stocks.


Tesla Inc.

Tomi Kilgore rounds up electric vehicle sales data, including Tesla’s ceding of the top spot to this company.

More news on companies from the Ratings Game:

The Moneyist thrives in a world of conflict

Quentin Fottrell — The Moneyist — keeps helping readers with difficult financial (and family) questions:

Another earnings season begins next week


MarketWatch photo illustration/iStockphoto

The largest U.S. banks will kick off fourth-quarter earnings season next Friday.

Steve Gelsi reports on what to expect for the big four U.S. banks.

Here’s a look at the largest 20 U.S. banks, with two standing out by a key performance measure as the industry gets closer to turning a corner.

Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.

[ad_2]

Source link

You may also like