I'm not jumping into small caps yet. While interest rate cuts may be nearer, investors’ risk appetite has become even MORE cautious. This does not bode well for a small cap rally.
The latest results from S&P Global's Investment Manager Index survey:
Survey respondents believe volatile geopolitics, an uncertain political climate and historically elevated valuations will likely drag on equities. The survey's Risk Appetite Index fell to -5%, its lowest mark since October 2023 and a steep decline from the May 2024 level of 28%, the highest since November 2021.
