The Federal Reserve came out with a major decision on Wednesday to begin tapering its bond purchases.
While this news will impact the overall stock market to a certain extent, I still see defensive companies with hefty dividends experiencing some upside at the expense of tech stocks.
But that’s not the only group of stocks with strong capital flowing in…
I always tell my viewers that the longer an asset consolidates, the bigger the move will be when it breaks out. And at the current moment, there are some BIG catalysts for upside opportunity in small-cap stocks…
How to Find Upside Opportunity in Small-Cap Stocks
Before we jump into today’s small-cap stocks, there are a few things we need to remember…
Large-cap stocks have much more sensitivity to interest rate fluctuations than smaller stocks. And larger companies typically carry more debt, so it makes it more expensive to repay with rates moving higher, cutting into future profits.
With the U.S. economy expanding, there’s a great chance we’ll see major upside opportunities in small-cap stocks.
Don’t forget, the correlation between large- and small-cap stocks is extremely tight. So any time we experience a big run-up in large caps, the scenario that follows is usually a rally in small-cap stocks.
And right now, small caps are in growth mode.
What I mean by that is they’re not as bloated and large like bigger stocks that need a catalyst every time they move.
Check out my short video below to learn about the potential upside opportunities in small-cap stocks right now.
I’ll even show you my two favorites!
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