Small Caps on the Brink: A Promising Turnaround in the Wake of the Fed's Pause

The Fed’s path of interest rates has caused a lot of pain over the last year. A variety of sectors and asset classes has continued to be hit hard in the current market, and, perhaps, none as badly as small caps. Firms on the smaller end of the market-cap scale have certainly been kicked to the curb as investors have avoided them.

But small caps may have the last laugh.

The Fed’s recent pause, along with several other factors, has made small caps a great buy in the current market. While risks remain, the rewards can be greater. For investors, betting big on the smallest constituents of the market could be the best play of the new year.