You've probably noticed that stock market growth in 2023 has been very lopsided. Our famous tech seven (Amazon, Meta, Tesla, Apple, Microsoft, Nvidia, Google) are up nearly 60% year-to-date.

The other 493 stocks in the S&P 500 are up just 4%.

That large stocks dominated the stock market in the first half of 2023 is not unusual. In fact, it's quite normal. Optimism and greed are replacing skepticism and caution, which may cause a shift from large-cap to small-cap. Investors are gradually betting on riskier cards.

This is exactly the phase of the market we could be in, and it wouldn't be the first time historically.

It happened in 2003 after the dotcom crash, for example, or in November 2009 (8 months after the stock market bottomed in 2008). Even with Covid. Each time, small cap stocks soared in the months and years that followed.

So one possibility could be that the second half of 2023 will be marked by small-cap companies. Eyes, then, on the ratio of S&P 500 to Russell 2000 performance. In recent weeks, that gap has already begun to narrow.