"We saw a raging bull market for large cap growth stocks in the late 1990s and a similar bull markets for value stocks since 2000,” said Stephen Wood, senior portfolio strategist at Russell. “But since the summer of 2006, growth and large caps have started to re-assert market participation and we think this has become a more stable, broad-based rally."
Indeed, the Russell 1000 (large cap) index has outperformed the Russell 2000 (Small cap) index by some 7 percent over the past year, with all of that outperformance accruing since May.
With the Russell setting an all-time high, the only major, broad-market index yet to regain its 2000 peak is the S&P 500, which loaded up on tech representation in the run-up to the bubble peak. Currently, the S&P 500 sits just 7 percent below its prior peak. (Then, of course, there is the NASDAQ Composite, which is still more than 50 percent below its best mark. It will take years to exorcise those demons.)
Even with the new high on the Russell 3000, of course, things aren’t all rosy for investors. Seven years is a long time to wait for a new all-time high, and once you factor in inflation, investors are still way behind. Assuming annual inflation of 2.5 percent, investors have lost about 18 percent of their purchasing power since the previous market high. Ouch…
Russell 3000 long-term chart:
