The Big Small Fight Continues
The Dow Jones Industrial finally did it this week, closing at a record high of 16,583. By all accounts investors should be thrilled to see the oldest U.S. stock index close at the highest level that we have ever seen. And yet most of the discussion and commentary surrounding the market cast doubts at such a lofty level. If the mega-cap stocks that comprise the 30 components of the Dow Jones Average are at all time highs what about their younger and smaller siblings, those that make up the Russell 2000 index? The Russell 2000 is comprised of 2000 small-cap companies. This index peaked on March 4th and has since dropped 8.4%. The market has debated which sector leads a market. Are small companies the barometer of the conditions we face, or do larger companies provide a better guide?