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Bob Carey
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  Snapshot of U.S. Equity Styles/Market Caps
Posted Under: Themes
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View from the Observation Deck

  1. Today's blog post is intended to expose potential opportunities within the growth and value styles of investing, as well as by market capitalization (market cap). It updates the one we did on 8/7/14.
  2. At any given time, the equities markets are likely being led up or down by one of the three market cap classifications. Often this leadership role can be held for a multi-year period.
  3. From 1995-1999, large-cap stocks outperformed their mid- and small-cap counterparts by a sizable margin. From 2000-2012, mid- and small-caps outperformed large-caps by an even bigger margin.
  4. From 12/31/12 through 12/3/14, however, the S&P 500, S&P MidCap 400 Index and the S&P SmallCap 600 indices posted similar cumulative total returns of 51.44%, 45.62% and 46.31%, respectively.
  5. As indicated in the chart, large-caps have been the leaders thus far in 2014.
  6. Five of the six categories have double-digit 2015 earnings growth rate estimates and five of the six have 2015 estimated P/E ratios below their three-year averages.
  7. We encourage investors to spend some time analyzing the figures in the chart.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. There can be no assurance that any of the projections cited will occur. The S&P 500, S&P MidCap 400 and S&P SmallCap 600 style indices are capitalization-weighted indices designed to measure large-capitalization, mid-capitalization and small-capitalization U.S. stock market performance.

To Download a PDF of this post, please click here.

Posted on Thursday, December 4, 2014 @ 3:25 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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