Why are mid-caps doing so well for now?

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golfallday
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Why are mid-caps doing so well for now?

Post by golfallday »

Mega-caps (SPY) are +3.09% YTD...Small-caps (IWM) are +3.45% YTD...while Mid-caps (MDY) are +8.26% YTD. Any thoughts on why mid-caps are currently doing so well? I'm quite pleased as the Mid-Cap 400 is part of my equity allocation in my 457 plan, but I can't figure it out.
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nedsaid
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Re: Why are mid-caps doing so well for now?

Post by nedsaid »

Markets will do what markets do. In the short term, it is hard to know what causes the markets to do anything! But evidently, the big institutions are loving mid-caps right now. I just wouldn't worry about shorter term moves in the market.

Many people believe that mid-caps are the "sweet spot" of the stock market. Large enough to have more stability and quality than small-caps and small enough to have good growth potential. Mel Lindauer calls these the "unloved mid-caps." Over long periods of time, this is a good place to be. This is a favored area of investment for me.
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livesoft
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Re: Why are mid-caps doing so well for now?

Post by livesoft »

Perhaps it is time to rebalance OUT of mid-caps? ;)
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Toons
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Re: Why are mid-caps doing so well for now?

Post by Toons »

Same reason Healthcare did so well for about 5 years. :happy
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Munir
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Re: Why are mid-caps doing so well for now?

Post by Munir »

golfallday wrote:Mega-caps (SPY) are +3.09% YTD...Small-caps (IWM) are +3.45% YTD...while Mid-caps (MDY) are +8.26% YTD. Any thoughts on why mid-caps are currently doing so well? I'm quite pleased as the Mid-Cap 400 is part of my equity allocation in my 457 plan, but I can't figure it out.
Ask Mel :happy
lack_ey
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Re: Why are mid-caps doing so well for now?

Post by lack_ey »

On a quick check, it looks like the Russell 1000 and S&P 500 have done similarly YTD, so that implies that broad mid caps (in particular, those in the top 1000 in market cap but outside the S&P 500) aren't collectively responsible for the difference, so it seems like it may be S&P's choice of mid caps for the S&P 400.
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Some mid cap funds:
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Vanguard's CRSP-based mid cap index fund is a bit larger, overlapping with the S&P 500. Also note above that the S&P 500 did beat the Russell Top 200, so I suppose some of the mid caps and smaller large caps did outperform the largest names.
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Kenkat
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Re: Why are mid-caps doing so well for now?

Post by Kenkat »

Munir wrote:
golfallday wrote:Mega-caps (SPY) are +3.09% YTD...Small-caps (IWM) are +3.45% YTD...while Mid-caps (MDY) are +8.26% YTD. Any thoughts on why mid-caps are currently doing so well? I'm quite pleased as the Mid-Cap 400 is part of my equity allocation in my 457 plan, but I can't figure it out.
Ask Mel :happy
It is because they are so unloved.
Northern Flicker
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Re: Why are mid-caps doing so well for now?

Post by Northern Flicker »

The SP400 midcap index has about a 4 percentage point larger allocation to the basic materials sector than the SP500 and about a 4 percentage point smaller allocation to the technology sector than the SP500. Those two sectors have moved in opposite directions YTD: think about gold miners and Apple.
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