|
|||
 |
Long Term Perspective
The Russell 2000 posted three declines in the past five years, leading the 10-year average growth to edge down to 6.7 percent in this stock measure in 2002. The Russell 2000 is a benchmark index for the small capitalization sector. It has a longer history than the S&P Small Cap Index and also has a wider base (2000 stocks vs. 600 for the S&P). Short Term Perspective
Small cap stocks seem to get hit more dramatically than large cap stocks in times of uncertainty (during the 1998 financial crises for instance). However, they also tend to rebound more sharply in economic recovery. Many high tech stocks are included in this index; as a result, it surged in late 1999 and the first half of 2000. This index gets revised each year in July when stocks no longer fitting the "small-cap" criterion are removed from the index. Fast growing high tech companies fit this description in the late 1990s - although many former high flyers were removed from the index in 2001 and 2002.
The Russell 2000 rose 8.3 percent in October, more than most of the other key market indexes. It isn't unusual to see large gains in the small cap market in a recovery.
 |
|
|
