When it comes to investing in the stock market, there are many options to choose from. Two popular choices are SPY and IWM, which track the performance of large-cap and small-cap stocks, respectively.
While both SPY and IWM can offer investors exposure to different segments of the market, we prefer small-cap stocks for a few reasons.
One reason is that small-cap stocks have historically outperformed large-cap stocks over the long term. This is due to their potential for higher growth and greater upside potential. Small-cap stocks are often less well-known and can be undervalued, providing investors with the opportunity for significant returns.
Additionally, small-cap stocks tend to be more nimble and responsive to changing market conditions. They can adapt quickly to new trends and opportunities, which can lead to faster growth and better performance.
Investing in small-cap stocks can also provide diversification benefits to a portfolio. By including small-cap stocks alongside large-cap stocks, investors can reduce overall risk and potentially enhance returns.
Overall, while both SPY and IWM have their advantages, we believe that small-cap stocks offer unique opportunities for investors looking to grow their wealth over the long term.