This week’s Sentiment Survey special question asked AAII members for their thoughts about the record highs recently set by the Russell 2000 index. More than one out of three respondents (37%) view the new highs in a positive manner. Many of these respondents say the upward move reflects the tax cuts, lighter regulatory environment or positive market conditions. An additional 8% of respondents say the outperformance of small-cap stocks was expected and 6% say the new highs reflect less exposure among smaller companies to a potential foreign trade problem. About 26% of respondents express a pessimistic view, with many not expecting the rally to last or otherwise anticipating a market correction. Not every member who took the survey answered the special question.
Here is a sampling of the responses:
- “Great! Good to see this kind of activity in smaller caps.”
- “It reflects the fact that the U.S. economy is doing well.”
- “Showing strength of smaller companies under the leadership of a business-friendly”
- “Probably based on small caps being less affected by trade war logic.”
- “The new highs are good for my portfolio, but I believe we are due for a correction.”
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