With the Russell 2000 index down 25.7% from the small-cap peak in late June 2015 through to the 2016 year to date low on 11 February, we are officially in bear market territory.
We see bear markets as a signal to buy and the small-cap market cycle looks healthy, with current valuations creating opportunities to build strong absolute long-term performance. We have gone from a small-cap environment where growth dominated - outpacing small-cap value in five of the last six calendar years - to value leading since last summer's peak. The market's behavior from that June 2015 peak through to the first few months of 2016 reflects uncertainty about a global economic environment where commodity prices continue to struggle, credit has tightened, and global currencies (...
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