“Small- and mid-cap stocks tend to outperform in a bull market as investors desire riskier assets, and I believe a new bull market has emerged since the mid-June lows,” columnist mbrushstocks writes.
If stock market FOMO is starting to bug you, but you’re hesitant to buy stocks, here’s a fix: Go small.These aren’t companies whose CEOs grab headlines when they speak. You may not even have heard of most of them. But when you buy their stocks, you are investing in the economic heart and soul of the U.S. Small companies employ most people in the country. You probably work for one.1. The smaller, the better The Russell 2000 Index RUT, +2.
“Valuation tends to be a poor short-term timing indicator, but it matters much more for long-term,” says the bank. Inflation is coming down, which reduces the risk that the Federal Reserve will create a recession. Besides, the economy actually looks sound. The Atlanta Fed GDPNow estimate for third-quarter GDP was moved up to 2.5% from 1.4% Aug. 10.
The best sectors and stocks In small-cap land, it’s best to favor energy and financials, says Bank of America. Their view is based on analysis of which sectors have the best upward earnings estimate revisions, relative valuations, price momentum and stock rating changes inside B of A. The bank says go easy on health care, communications services and utilities.
The natural gas company Comstock Resources also recently saw some insider buying in size when an officer purchased $428,000 worth of stock at $14.86 on Aug. 8. Comstock has been buying natural gas assets lately. The insider purchase looks like a signal that they got some good deals that will pay off for shareholders.
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