A little while ago I filmed a Russell 2000 forecast video, and explained how it was beginning to come back to life. We received a couple of comments on our YouTube channel requesting an update to that video, so today I’m giving the people exactly what they want!
The Russell 2000 is technically an index of 2,000 small-cap companies. But that’s a little misleading because most of the stocks trading on the Russell 2000 have a market cap of about $1 billion to $8 billion, so they’re not really small companies...
Think medium-cap stocks waiting to go prime time like Amazon in 2005 and Netflix in 2015.
But I don’t want to waste any more time, so let’s get into today’s analysis where I’ll give you my Russell 2000 forecast for the rest of 2021. I’ll explain exactly where I see the index landing by the end of the year, plus five stocks that are doing well.
The Russell 2000 is an important index because it’s highly sensitive to geopolitical events. And if you compare the Russell 2000 with the S&P 500 over the past five to 10 years, you’ll notice the correlation is usually close.
Usually, but not always…
If you look at a six-month chart, you’ll see that the Russell 2000 sometimes leads and lags. So the two don’t always move in step with each other.
One of those lag periods began when former U.S. President Donald Trump declared a trade war with China. You see, there are a ton of Russell 2000 stocks with huge correlation to China, and these smaller companies aren’t conglomerates like J&J and P&G.
So they don’t have a million different products. They tend to have one service that’s made in China, and when there’s an issue — BOOM!
They’re out of business.
Check out my short video below to get my Russell 2000 forecast for the rest of 2021 and the top 5 stocks to target within. And be sure to share your thoughts in the comments section below.
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