When was the last time you thought about small-cap stocks? If you’re like many investors, they’ve probably been off your radar for a while. But according to Jared Levy, Chief Market Strategist at Peak American Financial Group, that might be about to change.
During a recent discussion, Jared highlighted the recent “grand money rotation” in the markets. Investors are shifting their focus from the usual tech giants and popular large-cap stocks to the underdogs—the so-called “ugly ducklings.” It’s a trend that’s bringing small-cap stocks back into the spotlight.
Why Small Caps, and Why Now?
For a long time, small caps have been overlooked. The big money has been flowing into large tech companies and other well-known names. But now, with an election on the horizon and the economy holding steady, small-cap stocks are starting to look more attractive. Jared points out that many of these stocks are relatively cheap, offering a potential value play for savvy investors.
However, Jared cautions against diving into small caps blindly. Instead of going all-in on something like the Russell 2000, which is heavily weighted in financials, Jared has a different strategy in mind.
Jared’s Trade: SLYG for the Win
Jared’s play of choice is the SLYG ETF. This ETF is focused on the S&P 600, but what sets it apart is its sector weighting. Unlike the Russell 2000, which is top-heavy in financials, SLYG is more balanced with a focus on industrials, technology, and consumer discretionary sectors.
Jared is bullish on the American consumer, at least for the next six months to a year, and he believes that SLYG offers a unique spin on small-cap investing. He’s comfortable buying in at around $90 per share and holding until it reaches about $110.
“Listen, I feel pretty good about things for now,” Jared says. He acknowledges that the market could shift in a few months, but for the moment, he sees momentum in small caps and plenty of cash on the sidelines ready to move in.
Final Thoughts
Jared Levy’s insights remind us that sometimes the best opportunities come from the stocks that have been out of sight and out of mind. With a strategic pick like SLYG, investors might just find that the small caps they’ve been overlooking are poised for a comeback.
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