Small caps are in a bear market: Here’s what to do now
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Remember in early 2021 when investment experts were talking about a "Goldilocks" scenario for markets - that is, when global economies were going from strength to strength, earnings seemed to be going through the roof, and stocks pushed investors' portfolios to lust-worthy heights?
Well now, Goldilocks has well and truly been discovered by the three bears, with major indices around the world crashing in a risk-off market.
While the Aussie large-cap index is in correction territory, the S&P/ASX Small Ords Index has suffered far worse, having fallen more than 25% year to date. Anything more than a 20% fall from a peak is considered a bear market.
So how are the professionals navigating this difficult environment for small caps? Glad you asked.
Livewire's Ally Selby was joined by Medallion Financial's Michael Wayne and Hayborough Investment Partners' Ben Rundle for their top tips on how to do exactly that.
They share whether they have been buying the dip or selling the bounce in recent months, how much cash they are holding right now in portfolios, the signals they are watching, and six stocks for when markets rebound.
Note: This episode was filmed on Wednesday 12th October 2022. You can read an edited transcript below: