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« Weighing the Week Ahead: Is the Ukraine Crisis a Market Crisis? | Main | Site move in progress »

May 11, 2014


Brent Barber

While it would be normal for the large cap markets to follow the small caps down, I think it will actually be different this time. Recall that last year, the Russell 2000 was at all-time valuation highs, whereas the S&P 5000 was around average/slightly above average highs. This type of a situation cannot last long term, so it is is in the process of being resolved, with the Russell 2000 stocks valuations coming down.

It appears that overall money is not leaving the market, but instead just migrating from expensive areas of the market to cheaper ones and to parts of the market that will do well as the economy accelerates (eg. energy).

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