While the major equity indices are trading near all-time highs, the rally has been primarily driven by large-cap tech stocks. This performance gap suggests that there are still plenty of quality stocks flying under the radar that can be picked up at lower valuations.
In particular, the possibility of multiple interest rate cuts in the next 12 to 18 months should act as a tailwind for small-cap stocks, as these companies tend to benefit more from the lower cost of debt relative to their larger, more established counterparts.
