Good points Micheal.
Small-cap stocks can be a useful indicator of overall market sentiment, particularly in gauging investor risk appetite and economic optimism.
However, these stocks tend to be more volatile and riskier, so when small caps perform well, it often signals that investors are more confident and willing to take on higher risk.
Conversely, when small caps underperform, it suggests that investors are seeking safer, more stable assets, reflecting a more cautious market outlook.
Additionally, small-cap stocks are more sensitive to local economic conditions, making their performance a good measure of domestic economic health.
Strong performance in this sector may indicate economic growth, while poor performance could point to challenges.
Christian Harris