Small Caps Slipping?

Chart of the Week for August 6, 2004 - August 12, 2004

Small cap stocks fell dramatically in July with their worst decline since September 2002. The Russell 2000 Index of small stocks, shown in the chart above, fell 6.8%. Large cap stocks, as indicated by the S&P 500 Index above, had less of a decline in returns for July (-3.4%) making it only the 9th time in the past 24 months that large cap stocks outperformed small cap stocks. Small cap stocks have been leading much of the market recovery over the past year and a half, however it appears their momentum may be slipping. Some analysts and advisors continue to encourage investors to diversify to assist in maintaining their portfolio objectives.

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