anuragmukherjee28
Moderator
Over the last decade, Small-Midcaps have been the best-performing equity class. Do you think they are due for a correction now, should be exercise caution before investing in Small Caps going forward?
Are Smallcaps and Midcaps Overheated?
- Thread starter anuragmukherjee28
- Start date
arjungoyal12
KF Mentor
Smallcaps are a great option to get the best out of your investment. I think it will keep doing so for the time being & the future as well
Gigachad
KF Mentor
90% of small cap fund outperform the index.
I'm Midcap it's 40%.
Though small cap are very volatile.
Both Midcaps and Smallcaps have shown excellent performance this year, with Midcap Index gaining almost 30% while the Nifty 50 has seen only a 10% increase. These strong gains may suggest that this particlular segment could be overheated.
Moreover, there has been a huge influx of investments into Midcaps and SmallCaps (mostly from retail investors like you and me), which could indicate a herd behavior following a specific trend (rather than fundamentals).
From my understanding, the fundamentals for both Midcap and Smallcaps companies haven't changed much in the past 1-2 years which could justify mind-boggling returns. I'm surely going to stay away from both these segments for the next few months, would love to hear what other investors have to say?
P.S- This is not an investment advice, just sharing my thoughts on the market
Moreover, there has been a huge influx of investments into Midcaps and SmallCaps (mostly from retail investors like you and me), which could indicate a herd behavior following a specific trend (rather than fundamentals).
From my understanding, the fundamentals for both Midcap and Smallcaps companies haven't changed much in the past 1-2 years which could justify mind-boggling returns. I'm surely going to stay away from both these segments for the next few months, would love to hear what other investors have to say?
P.S- This is not an investment advice, just sharing my thoughts on the market
Midcaps and Smallcaps would always be over heated at any point of time primarily on account of the potential that these companies exhibit. Also one more reason is the fact that these companies can bring about a complete innovative solution / product which can take on the Established firms.
However, you need to always keep on churning / averaging out these type of stocks as part of your portfolio through extensive research as well as continuous performance monitoring which are essential.
However, you need to always keep on churning / averaging out these type of stocks as part of your portfolio through extensive research as well as continuous performance monitoring which are essential.
