Video: Market Performance by Market Cap

A quick look at stock market performance by market cap slices. Simply put, smaller cap stocks (e.g., Russell 2000 (IWM)) tend to outperform larger cap stocks (S&P 500 (SPY) used in the video) during “risk-on” market cycles. This is probably driven by investor psychology and investors’ attitudes toward risk in the market. If we understand this, the persistent performance of smaller caps through 2014, which lines up with a period of mostly sideways market prices, is not so troubling. Some charts and a look at a slightly longer historical perspective in the video help to illustrate these points.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.