Experts Predict Sustained Rally for Small-Cap Stocks

Average performances of small-cap stocks emerged as one of the few lucrative market sectors Wednesday when the Russell 200 index reached a record peak of 609.61, USA Today reports. With the Russell 2000 up almost 9.5% this year, investors positioned in large-cap stocks found in the Dow Jones industrial average, which sunk to 0.7% during the same period, are increasingly eyeing smaller stocks as profit centers during an otherwise gloomy market environment. Experts also interpreted the Wednesday's quarter-point short-term interest rate hike by the Federal Reserve as a boon for small-cap stocks, which typically have a competitive edge when interest rates rise. Small-cap stocks on average also offer more attractive valuations than large-cap competitors, an average 30% discount, and respond better to regulatory changes, like Sarbanes-Oxley.