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.
