Small stocks are about to take over? Wall Street has heard that before.
After getting trounced by their larger rivals for years, some of the smallest stocks on Wall Street have shown much more life recently. Hopes for coming cuts to interest rates have pushed investors to look at smaller stocks through a different lens, and they soared recently during a five-day winning streak. Investors pumped $9.9 billion into funds focused on small U.S. stocks last week, the largest amount since 2007. If that all sounds somewhat familiar, it should. Hope for a broadening out of the market swept Wall Street late last year. It ended up fizzling. Professional investors still aren’t convinced this time is different.