Why Small-Cap Stocks Could Be Ready to Outperform After Rate Cuts
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
Small-Cap Stocks Performance: Small-cap stocks, represented by the iShares Russell 2000 ETF (IWM), are particularly sensitive to interest rate changes and have historically outperformed larger-cap stocks following Federal Reserve rate cuts. With recent rate cuts and a favorable seasonal period approaching, small caps may be positioned for a rebound.
Investment Options for Small-Cap Exposure: The IWM offers diversified exposure to small-cap stocks with a moderate buy rating and potential upside, while the more aggressive Direxion Daily Small Cap Bull 3X Shares (TNA) provides leveraged returns for risk-tolerant investors, albeit with higher risk.
Analyst Views on IWM
Wall Street analysts forecast IWM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for IWM is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
