Is There a Small Cap Value Premium Going Forward?

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Many periods where you see small and value stocks underperforming the market, say from 2010 to 2019. And there are other periods when you see it greatly outperforming the rest of the market. In this past year, you've seen that small cap value is outperformed the market by 8 to 10%. But it really seems to be the value factor at work for years like this.

In this episode we answer emails from Bradley, Chris and Andreas. We discuss traditional versus Roth considerations in retirement accounts, REITs, some risk parity fundamentals about the interplay between asset classes and macroeconomic environments and how that relates to correlations, a recent risk parity backtest to 1926 and the real reasons to use small cap value allocations. I'm telling you, fellas, you're gonna want that Cowbell!

Links:

REIT Sectors and Directory: REIT Sectors | Nareit

Episode 5 Bridgewater Article on Risk Parity Fundamentals: Microsoft Word - 2009.12 AW Info Pack.doc (granicus.com)

Early Retirement Now Article re Small Cap Value: My thoughts on Small-Cap and Value Stocks – Early Retirement Now

Analysis of Small-Cap Value vs. Total Market since 1972: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)

Bloomberg Presentation re Performance of Various Asset Classes in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)

Merriman Podcast (12/21/2022) on Small Cap Value Stocks: 10 reasons small-cap value can make you richer - Paul Merriman