If that's the case it could be especially good for small-cap "because traditionally, when the economy is on stable footing, small and mid-cap stocks outperform large and mega-cap stocks
For example, Table 3 shows that the S&P 500 Equal Weight Index has the highest allocation to mid-cap stocks and the lowest allocation to mega-cap stocks
. Equal weight indexes provide the same weight to every company in an index.
It holds mega-cap stocks
like Apple Inc., Exxon Mobil Corp.
US Mega-Cap Stocks
and International Equities Warrant a Closer Look
"And I think investors will get tired of mega-cap stocks
, like Intel and Microsoft, once the diminishing returns take over."
"There is growing evidence that the concentration of performance among the mega-cap stocks
has started to wane," says Lehman Brothers' report
"For investors this may mean favoring the mega-cap stocks
over smaller competitors, since current leaders may not be displaced as quickly or have their market position challenged as aggressively, which may push their valuations higher as they sustain better relative profit growth," he said.
From a capitalization perspective, mega-cap stocks
have narrowly underperformed smaller caps, and we would advise investors to stick with a mega cap bias.