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Large Caps v Small Caps     

gallick - 06 May 2004 00:13

I have noticed over the last few days that the large caps (FTSE-100 etc) have been moving ahead and AIM stocks in general have done sweet FA (football association).

For example on Tuesday the FTSE was up 50 points (over 1%) but the majority of AIM stocks were down. This is quite seriously bad news for most money am bb'ers who seem to be almost exclusively small stock players.

Is it time to jump to the big boys... cos I am actually struggling to find serious smaller company shares right now (ASOS excepted)??

Whadddyyya think guys and gals

Regds
gk

crystalclear - 06 May 2004 12:10 - 5 of 8

Indices are like averages. If you invest in an average, you will only get average performance. Big companies are unlikely to explode in size. So I see it as only being worth investing in the smaller companies, but cherry picking the stocks, rather than hoping to get average performance.

But if the FTSE stocks have been outperforming AIM, surely it is time to jump to AIM and not the other way round.

When you go shopping, do you say, "ooh look, Beans are expensive today, let's get some of those?"

Share Bear - 06 May 2004 14:02 - 6 of 8

crystal,

I agree with your comments and I also still prefer the smaller cap stocks, but I would suggest the expensive beans may be the small caps:

graph.php?startDate=06%2F05%2F02&epic2=A

SB ;-)

brianboru - 06 May 2004 14:16 - 7 of 8

As the chart shows small caps had an oustanding run last year. Many commentators I've heard or read believe they will be outperformed by the blue chips this year.

crystalclear - 07 May 2004 08:58 - 8 of 8

graph.php?startDate=01%2F01%2F04&epic2=U

Yes, I think it is likely that the blue chips will outperform the small caps this year. Compared to FTSE type stocks, it looks like the small caps have done very well and are are overdue a correction.

graph.php?startDate=01%2F01%2F04&epic2=A

But looking at cherry picked stocks, the scale of the graph changes, and the black line of average AIM stock performance ceases to look so impressive.
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