The Tide Has Turned: The Era Of Small Cap Outperformance Is Over [View article]
For institutional investors (my clients) this is not so much an issue. I understand for many retail brokerage customers it will be more of an issue although Interactive Brokers is one example where a broker offers "portfolio margining" which will recognize the low risk in the trade and reduce the full two-legged margin quite significantly.
The Tide Has Turned: The Era Of Small Cap Outperformance Is Over [View article]
Small caps (some individual names in particular) will do quite well in their own right - I am sure you have/can find many to your liking. But I see more headwinds for the small caps as a whole versus the large caps not least of all because of the much higher valuations and growth priced in already after a decade of re-rating. My analysis highlights the need for a robust consumption and construction sector for the broad Russell 2000 to outperform - so a more positive view on small caps versus large caps must be based on a rosy US recovery/growth scenario. We all hope so but that isn't my view for the moment. Although even in that case, the resulting return of fund flows to equities would probably favor the more liquid large caps as they did in 1986 and the late 90's in particular.
The Tide Has Turned: The Era Of Small Cap Outperformance Is Over [View article]
The Tide Has Turned: The Era Of Small Cap Outperformance Is Over [View article]